HDFC Asset Management, 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 to stock selection.
The captioned new fund offer (NFO) opens on September 14, 2023, and closes on September 28, 2023, the company said in a statement on Thursday. 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 spending as a percentage of GDP is still low when compared to other emerging and developed economies.
Rising life expectancy, changing disease patterns, a higher share of the elderly population and insurance uptake would propel higher domestic healthcare spend in the long term. Further, India holds a unique position of being the ‘pharmacy of the world’, boosted by supplies of vaccines and other therapeutics for the COVID-19 pandemic.
Enabling factors such as the government’s PLI scheme, labour cost advantage and technical know-how should further boost India’s global competitive position. Additionally, with USD 98 billion worth of small molecule drugs going off-patent over the next 5 years provides a big opportunity for Indian pharma companies.
Navneet Munot, 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 a 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 Nikhil Mathur, Fund Manager and Senior Equity Analyst, at 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 the core of the portfolio (> 80 per cent) in pharma and healthcare-related companies. This includes basic industries like Pharmaceuticals, Hospitals, Healthcare Service Providers, Healthcare Research, Healthcare Analytics and technology, and Medical Equipment and Supplies.
The Fund seeks to invest in companies which operate in a secular growth segment and/or gain market share due to unorganized-to-organized shift, superior execution, scale, better adoption of technology etc.