Pharma Funds - Need a perspective

#1
Hi,

I have a well diversified portfolio across market caps and I am quite happy with the allocations.

I am interested in the Pharma story in India and looking for opinions as to why funds managers shy away from this safe sector?

I am looking at taking a small exposure through SIP to Franklin Pharma Fund.

any thoughts would be highly appreciated (I am WELL aware of the risks associated with sector funds and that diversified approach is the way to go).:)
 
#2
Friend,

I stay away from Sectoral funds as much as possible, but will try to give a perspective from a stock investor's point of view. I did look up Franklin Pharma Fund seems to be a good one and I commend your choice.

Coming to the pharma story, I do believe that the overall outlook for pharma industry in India is bright for the coming years. I do have some stocks in my personal portfolio from this sector and will always have a good portion of my portfolio in this sector. Different companies have different products and profits-making capabilities, but overall the story looks to be good.

I have observed this industry to be a news sensitive one, capital intensive and has a longer period of product deployment. Hence, there can some blips (serious blips if you hold individual stocks :() in this sector. However, with increasing lifestyle diseases, fast-food based lifestyles, one can expect that this sector will grow at a good pace in future.


Happy Investing !!
 
#3
Thanks Asterix, that does help.

I do not have any investments in Equity other than through Mutual Funds but I am so bullish on Pharma after my research that today I entered the stock market and purchased 1 share of Sun Pharma.

Maybe we can discuss our pharma picks in the Equities section of the forum or you could PM me.
 
#4
Hi Diesel,

I did some more searching and have some further points for you. I looked up the MF Yearbook 2010 by VROL and unfortunately, I couldn't find a single pharma fund under recommendations. In the sectoral fund category, Infrastructure, Technology, Banking and Power are the only ones which have some representation.

Interestingly, Taurus AMC seem to be betting on Health Care sector as I found many of it's funds having HealthCare as the largest sector. Taurus Tax Shield, a 5-star rated ELSS has Healthcare as it's top sector, which may augur well for you if you are looking for both Pharma exposure and ELSS savings.

From a Pharma sector oriented fund, you can consider Reliance Pharma which has delivered some good returns as compared to both Franklin Pharma and Magnum Pharma.

I hope you have all the data to start investing into pharma sector. On a personal note, I would advise you to invest into a pharma MF along with some specific stock picks.

Happy Investing !!
 
#5
Asterix, could you recommend a few Pharma stock I could research since you are invested in this sector?

Also, I compared all 4 pharma funds on Value research and Franklin had the best returns and highest alpha/lowest Beta.

I will look up the Taurus fund that you suggested.

What a yearbook? Do I need to buy that?
 
#6
Hi Diesel,

Everyyear VROL comes up with a bouquet or collection of fund recommendations, which can be used to construct one's portfolio. Basically, VROL provides a collective recommendation of some 70 funds which will be useful as a reference to construct your analysis on.

In case you are an avid MF investor or want to understand more, you can consider buying it. It's not very expensive and can provide a good insight into all funds. Let me also state that most of this information is also available at VROL website.

Regarding pharma picks, I will try and respond on your equities thread. However, as I had told earlier, Biocon is a good one to consider along with Torrent Pharma. But more details, in the equities thread.

Happy Investing !!
 

yodlee99

Active Member
#7
I do agree that pharmaceuticals have become bread & butter in the society due to various reasons including pollution, fast-food consumption etc. I did make some investment in Reliance Pharma way back in 2007 and it has given good returns. This sector has its own challenges to overcome, just like other sectors. It is pretty difficult to track movements in any sector unless you are employed in the higher-level and can see the trend very well. If you can average investor like most of us here, be invested in equity diversified funds and be sure that they have invested in pharma stocks. I would also like to state that do not invest more than 10% in all sectoral funds put-together.
 
#8
Hi Diesel,

Everyyear VROL comes up with a bouquet or collection of fund recommendations, which can be used to construct one's portfolio. Basically, VROL provides a collective recommendation of some 70 funds which will be useful as a reference to construct your analysis on.

In case you are an avid MF investor or want to understand more, you can consider buying it. It's not very expensive and can provide a good insight into all funds. Let me also state that most of this information is also available at VROL website.

Regarding pharma picks, I will try and respond on your equities thread. However, as I had told earlier, Biocon is a good one to consider along with Torrent Pharma. But more details, in the equities thread.

Happy Investing !!
@ asterix: looking forward to your pharma picks in the Equities section :)
 
#9
Hi Diesel,

I will give you my recos in Equities section by Sat evening. A bit busy with work and also am facing some issues with Traderji. Connection is very flaky. Anyone else also facing the same?

Happy Investing !!
 

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