The pharmaceutical industry is among the fastest-growing business sectors in the nation, so pharma mutual funds prove to be an intelligent investment option for investors in 2025. As India’s population increases, healthcare requirements rise, and medicine exports from the nation increase globally, pharma stocks are performing extremely well. These mutual funds invest your funds in the most superior pharma and healthcare stocks, providing you an opportunity to generate good returns while contributing to India’s health industry.
Why Invest in Pharma Mutual Funds?
Pharma mutual funds are unique investment funds that invest your money in pharmaceutical, healthcare, and medical firms. India’s pharma sector has been expanding at 9.43% annually for the last nine years, which is significantly quicker than most other sectors. The industry has advantages due to India’s expertise in manpower, low production expenses, and high demand for generic drugs globally.
These are ideal for those who wish to take advantage of the healthcare boom without having to individually research the stocks of individual companies. Your money is dispersed among numerous different health care companies when you invest in a pharma mutual fund, making it less risky for you but still providing you with good growth opportunities.
Learn More: 5 Best Oil and Gas Stocks in India
Top 10 Pharma Mutual Funds in India 2025
Following are the top pharma mutual funds that you must invest in 2025, as per their performance and size of fund:
| Fund Name | Current NAV (₹) | AUM (₹ Crores) | 3-Year CAGR (%) | 5-Year CAGR (%) | Expense Ratio (%) |
|---|---|---|---|---|---|
| Nippon India Pharma Fund | 584.33 | 8,357 | 25.78 | 22.94 | 0.89 |
| ICICI Pru Pharma Healthcare & Diagnostics Fund | 43.78 | 6,162 | 30.56 | 22.37 | 1.04 |
| SBI Healthcare Opportunities Fund | 498.72 | 3,963 | 29.85 | 25.24 | 0.91 |
| DSP Healthcare Fund | 45.20 | 3,107 | 27.74 | 24.37 | 0.60 |
| Mirae Asset Healthcare Fund | 35.15 | 2,796 | 25.23 | 23.58 | 0.49 |
| HDFC Pharma and Healthcare Fund | 18.08 | 1,909 | 27.30 | – | 1.20 |
| Tata India Pharma & Healthcare Fund | 28.50 | 1,309 | 25.98 | 23.00 | 0.62 |
| Aditya Birla Sun Life Pharma & Healthcare Fund | 22.40 | 1,200 | 19.44 | 18.50 | 1.15 |
| WhiteOak Capital Pharma and Healthcare Fund | 15.75 | 850 | 24.60 | – | 1.25 |
| Invesco India Healthcare Fund | 19.20 | 750 | 22.30 | 20.10 | 1.30 |
Brief Explanation of Top 10 Pharma Mutual Funds in India
Nippon India Pharma Fund
This is India’s largest pharma mutual fund with more than ₹8,357 crores of investor funds. The scheme has been operational since 2004 and has provided consistent returns over the years. It invests in leading pharma firms such as Sun Pharma, Dr. Reddy’s, and Cipla. The fund manager has an eye on companies with high-quality research and development organizations.
ICICI Prudential Pharma Healthcare & Diagnostics Fund
This is the fund offered by ICICI Prudential and invests in pharma and healthcare firms. It has provided top-notch 3-year returns of 30.56% and ranks among the best-performing funds of this type. The fund invests in firms right across the healthcare chain, starting with the manufacturers of medicines to diagnostic centers.
SBI Healthcare Opportunities Fund
SBI’s pharma fund is one of the oldest in this space, beginning in 2004. With almost ₹4,000 crores in assets, it’s a mature fund that invests in large as well as medium-sized healthcare stocks. The fund has been consistently performing with a 5-year CAGR of 25.24%.
DSP Healthcare Fund
DSP Healthcare Fund is unique due to its low cost ratio of only 0.60%, and that leaves more of your gains in your pocket. The fund has generated robust 3-year returns of 27.74% and invests in quality healthcare firms. It’s managed by seasoned fund managers who are very aware of the pharma industry.
Mirae Asset Healthcare Fund
This fund has the lowest cost ratio compared to other big pharma funds with only 0.49%. Being comparatively newer, it has established a good track record with stable returns. The fund invests in a combination of pharmaceutical firms, hospitals, and diagnostic service providers.
HDFC Pharma and Healthcare Fund
Released in 2023, this is a relatively new pharma fund but has already received significant attention from investors. During its first year, the fund returned a whopping 27.3%. The fund is managed by skilled professionals and targets established and new healthcare firms.
Tata India Pharma & Healthcare Fund
This Tata Mutual Fund scheme has been in existence for almost 10 years and enjoys a healthy reputation. Having a 3-year return of 25.98%, this fund provides sustained growth to investors. The scheme invests along the healthcare value chain like pharma, hospitals, and medical devices.
Aditya Birla Sun Life Pharma & Healthcare Fund
It invests in businesses that gain from India’s emerging healthcare requirements. Although its current performance is average against peers, it is a well-diversified one across healthcare industries. It is apt for investors searching for stable, long-term returns.
WhiteOak Capital Pharma and Healthcare Fund
WhiteOak’s pharma fund is small but has performed well in the last few years. The fund takes quality stocks with good fundamentals and growth prospects. It’s for investors seeking exposure to mid and small-cap healthcare stocks.
Invesco India Healthcare Fund
This fund has a distinct strategy of investing in the entire healthcare system. Right from the pharmaceutical sector to the healthcare service providers, the fund gives wide exposure to the industry. It is best suited for those who seek full healthcare industry exposure.
Pharma Mutual Funds Investment Considerations
- Benefits of Pharma Mutual Funds: Pharma mutual funds have several benefits for investors. First, they provide access to an expanding industry without the need to have intimate knowledge of specific companies. Second, experienced fund managers invest based on detailed research. Third, these funds diversify your portfolio away from the conventional areas of IT and banking.
- Risks to Consider: Pharma mutual funds also have some risks. There can be regulatory changes in various countries affecting pharma companies. Pharmaceutical pricing pressures and patent revivals can hit company margins. These funds are also more volatile than diversified equity funds.
- Who Should Invest: Pharma mutual funds are most appropriate for long-term investors with a horizon of minimum 5-7 years. They are suitable for those who are convinced of India’s growth story in the healthcare sector and can ride out short-term volatility. These funds should be bought as part of a diversified portfolio and not as individual investments.
Learn More: 5 Best Solar Energy Stocks in India
Conclusion
Pharma mutual funds offer a great chance for investors who want to gain from the expansion of India’s healthcare industry in 2025. The first 10 funds mentioned above have returned good performance and are run by skilled professionals familiar with the pharmaceutical sector.
Of these funds, Nippon India Pharma Fund and ICICI Prudential Pharma Healthcare Fund are notable for their steady performance and massive fund sizes. For budget-constrained investors, Mirae Asset Healthcare Fund and DSP Healthcare Fund provide low expense ratios without sacrificing returns.
Keep in mind that pharma mutual funds are industry-specific investments that may prove more volatile than diversified equity funds. It’s best to invest via SIP (Systematic Investment Plan) in order to maintain the effect of volatility of the market and to restrict exposure of pharma fund to 10-15% of your overall portfolio.
Prior to investment, reflect on your risk tolerance, investment horizon, and financial objectives. If you’re unsure regarding the fund that best addresses your needs, get in touch with a financial advisor. Given that India’s pharma industry is projected to continue on its growth spurt, these funds prove to be a bright prospect for long-term wealth accumulation.
Disclaimer: The above information is for educational purposes only and is not to be construed as an investment recommendation. Investments in mutual funds are subject to market risks. All scheme documents should be read carefully before investing.
