Invesco Mutual Fund floats Pharma and Healthcare Fund: NFO open till September 1; check details, peer performance

Invesco Mutual Fund has launched the Invesco India Pharma and Healthcare Fund, an open-ended equity scheme that will invest across the pharmaceutical, healthcare and allied industries. The new fund offer (NFO) opened for subscription on August 18 and will remain open until September 1.

The scheme will be benchmarked against the BSE Healthcare Total Return Index (TRI) and will be managed by Aditya Khemani, Head of Equity and Fund Manager at Invesco Mutual Fund.

What will the fund invest in?

Unlike a fund focused exclusively on pharmaceutical companies, the Invesco India Pharma and Healthcare Fund will invest across multiple segments of the healthcare ecosystem. Its portfolio may include pharmaceutical manufacturers, hospitals, diagnostic companies, contract development and manufacturing organisations (CDMOs), contract research organisations (CROs), medical device manufacturers and healthcare service providers.

The scheme may also invest in insurance companies and other businesses linked to the healthcare ecosystem.

According to Invesco Mutual Fund, the investment case is supported by the long-term growth potential of India's healthcare sector. Factors such as increasing healthcare expenditure, wider insurance coverage, an ageing population, rising lifestyle-related diseases and expanding healthcare infrastructure are expected to support demand.

The fund house also highlighted India's position as a major pharmaceutical manufacturing and outsourcing hub, along with opportunities arising from innovation in healthcare and life sciences.

Investment strategy

The fund will seek businesses with sustainable competitive advantages and strong visibility of long-term growth across different parts of the healthcare value chain.

This approach gives the scheme flexibility to invest across established pharmaceutical companies as well as hospitals, diagnostics, CDMOs, CROs, medical devices and other emerging healthcare segments. The portfolio, therefore, is not expected to be restricted to a single industry within the broader healthcare sector.

Minimum investment and exit load

The minimum investment during the NFO is Rs 1,000, while additional investments can be made in multiples of Rs 1. The minimum SIP investment is Rs 100, also in multiples of Rs 1.

The scheme will charge an exit load of 0.50% if investors redeem or switch out their units within three months from the date of allotment. No exit load will be charged for redemptions after three months.

What are Pharma and Healthcare sectoral funds?

Pharma and healthcare sectoral funds are equity mutual funds that invest predominantly in companies operating within the pharmaceutical and healthcare ecosystem. These can include drug manufacturers, biotechnology firms, hospitals, diagnostic companies, medical device makers and healthcare service providers.

Since these schemes have concentrated exposure to one sector, they generally carry higher sector-specific risk than diversified equity funds. Their performance can be affected by factors such as regulatory changes, drug approvals, pricing policies, healthcare spending, global demand and valuations of healthcare companies.

Peer comparison

The pharma and healthcare mutual fund category has delivered strong one-year performance, with the top 10 schemes generating returns between 19.12% and 25.46%. HDFC Pharma and Healthcare Fund leads the category at 25.46%, followed closely by Kotak Healthcare Fund at 25.07%. PGIM India Healthcare Fund and Edelweiss MSCI India Domestic & World Healthcare Fund also delivered more than 22%.

Notably, newer schemes such as Bajaj Finserv Healthcare and WhiteOak Capital Pharma and Healthcare have matched established funds with 21.86% returns. SBI Healthcare Opportunities and Quant Healthcare also remained among the stronger performers.

Pharma & Healthcare Funds: Top 10 by 1-year return

However, the category carries very high risk, and performance is concentrated around healthcare and pharmaceutical businesses. Investors should therefore consider sector-specific risks, valuations and longer-term consistency rather than selecting a fund solely on its one-year return.