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HDFC Asset Management Co. Ltd., investment manager to HDFC Mutual Fund (HDFC MF), one of India’s leading mutual fund houses has announced the launch of HDFC Pharma and Healthcare Fund. This open-ended equity scheme intends to invest in pharma and healthcare related companies with a bottom-up approach for stock selection. The captioned NFO opens on September 14, 2023, and closes on September 28, 2023.

The pharmaceutical and healthcare theme offers a unique proposition that benefits from rising domestic healthcare spend and manufacturing leadership in global markets. Private healthcare spend has grown at a brisk pace in recent years, but there is considerable headroom given that healthcare spend as percentage of GDP is still low when compared to other emerging and developed economies. Rising life expectancy, changing disease patterns, higher share of elderly population and insurance uptake would propel higher domestic healthcare spend in the long-term. Further, India holds unique position of being the ‘pharmacy of the world’, boosted by supplies of vaccines and other therapeutics for Covid-19 pandemic. Enabling factors such as government’s PLI scheme, labor cost advantage and technical knowhow should further boost India’s global competitive position. Additionally, with ~ USD 98 bn worth of small molecules drugs going off-patent over the next 5 years provides a big opportunity for Indian pharma companies.

Commenting on the launch, Mr. NavneetMunot, Managing Director and Chief Executive Officer, HDFC Asset Management Company Limited said, “We are delighted to introduce the HDFC Pharma and Healthcare Fund to our investors. At HDFC Mutual Fund, we have always endeavoured to be a one-stop solution for varied financial goals and have delivered wide array of opportunities through our diverse product bouquet. HDFC Pharma and Healthcare Fund becomes the latest addition to our diverse set of offerings”

The fund will be managed by Mr. Nikhil Mathur, Fund Manager and Senior Equity Analyst, HDFC Asset Management Company Limited. Commenting on the launch, Nikhil Mathur said “India will continue to command leadership in global pharmaceutical supplies on the back of low-cost manufacturing, ready pool of scientists and track record of meeting stringent quality requirements. Meanwhile on the domestic market front, rising awareness towards health is a key growth driver for the long term.”

HDFC Pharma and Healthcare Fund aims to invest core of the portfolio (> 80%) in pharma and healthcare related companies. This includes basic industries like Pharmaceuticals, Hospital, Healthcare Service Provider, Healthcare Research, Healthcare Analytics & Technology, Medical Equipment & Supplies. The Fund seeks to invest in companies which operate in a secular growth segment and/or gaining market share due to unorganized-to-organized shift, superior execution, scale, better adoption of technology etc.