Nippon India Pharma Fund

The Nippon India Pharma Fund is an equity scheme investing in the pharma sector. It was launched on 5th June 2004 by Nippon India Mutual Fund.

The Nippon India Pharma Fund distributes its investments across pharmaceuticals and biotechnology, and healthcare services companies of the pharma sector. It is managed by Sailesh Raj Bhan.

The primary investment objective of the scheme is to seek to generate consistent returns by investing in equity and equity-related or fixed-income securities of companies in the pharmaceutical and related industries. It aims to achieve its objective by investing in companies that meet criteria such as strong management, established performance history, growth potential, and favourable industry economic conditions.

The Nippon India Pharma Fund invests at least 80% of its assets in equity and related instruments. It has the flexibility to invest up to 20% of its assets in debt, money market instruments, REITs, and InvITs.

Pros & Cons

How to invest in Nippon India Pharma Fund?

5paisa makes it simple and convenient for users to invest in the Nippon India Pharma Fund Direct-Growth. The procedure is straightforward, can be finished quickly, and does not include any paperwork at any point. Invest a few minutes in carrying out the steps listed below:

Step 1: Log in to your 5Paisa Account. If you do not have one, register and create a new 5Paisa account in 3 easy steps. Alternatively, you can download the 5Paisa app on your smartphone for Android or IOS and log in from your device.
Step 2: Search for the Nippon India Mutual Fund scheme that you want to invest in
Step 3: Select the option that is apt for your requirement and risk appetite
Step 4: Select the investment type – SIP (Systematic Investment Plan) or Lumpsum
Step 5: Input the amount that you’d like to invest and proceed with payment by clicking on the ‘Invest Now’ button

That’s it! This sums up the investment process. Once your payment is successful, you can see the Nippon India Mutual Fund reflected in your 5Paisa account in 3-4 working days. If you have selected the SIP option, the chosen amount will get deducted every month starting from the date you have made the payment.

What is the expense ratio of the Nippon India Pharma Fund?

When referring to the Nippon India Pharma Fund Direct-Growth or any other mutual fund, the word “Expense Ratio” refers to the fund’s annual operating expenses as a percentage of its total assets, which can impact a scheme’s returns for investors. A lower expense ratio usually means the fund is less costly and may generate higher returns for the investors.

Who should invest in Nippon India Pharma Fund?

The Nippon India Pharma Fund is ideal for investors seeking long-term capital appreciation and investment in equity and equity-related securities of pharma and related companies. Investors looking to include a focused pharma sector investment in their overall asset allocation strategy should consider this scheme.

The scheme has exceeded the performance of the S&P BSE Healthcare TRI since its inception, with a compound annual growth rate (CAGR) of around 15.4% over the same period, highlighting its annualised growth performance.

The Nippon India Pharma Fund is ideal for those with a long-term investment strategy and a willingness to accept very high levels of risk. It is suitable for investors who have a keen understanding of macro trends and are looking for high-return investments. This fund is not recommended for those who prefer short-term or risk-averse options. Investors should be prepared to hold the scheme for a minimum of 2 to 3 years and must understand that there may be losses even in favourable market conditions.

What are the benefits of investing in the Nippon India Pharma Fund?

● The Nippon India Pharma Fund offers the advantage of having a concentrated portfolio of pharmaceutical companies, increasing the potential for generating alpha and achieving long-term wealth creation.
● The scheme has consistently outperformed its benchmark and category average since its inception, delivering a CAGR of around 15.4%.
● It invests in the pharmaceutical sector, characterised by low capital requirements and strong cash flows, thereby reducing the impact of overall market fluctuations.
● The pharma and healthcare segment is poised for multiple years of steady growth, driven by factors such as increasing domestic demand, boosted exports, stabilising US markets, growth in healthcare services, and insurance penetration.
● The Nippon India Pharma Fund offers a comprehensive investment opportunity, with holdings across key pharmaceutical industry segments, including domestic and international companies, branded and generic drugs, and contract research and manufacturing.
● It adopts a structured approach to managing investment risk, including ongoing market and economic analysis, research investments, and bonds and debentures assigned investment grade ratings by approved rating agencies.