Sustainable, secure, and reliable healthcare has always been one of the major financial concerns of many investors. They have been consistently viewed as savings instruments which provide the benefits of both, capital appreciation and income growth, while taking care of all their health-related needs.
This tendency to look for safe healthcare investment options has become all the more prominent since medical expenses have begun witnessing a massive rise. It thus comes as no surprise that professionally driven and competently diversified healthcare-specific mutual funds have started gaining greater attention.
The need of these funds is especially being felt by the new crop of millennials who have just begun their stint with the stock market. Healthcare benefits accessible via these funds do not just cover their medical expenses for a long tenure but they also offer multiple opportunities for capital accumulation and income generation.
Listed here are the top ten mutual funds which can help millennials narrow their monetary risk profile while obtaining a decisive healthcare advantage.
1. Reliance Pharma Fund
Launched in 2004 as an equity fund, the Reliance Pharma fund currently holds assets worth Rs. 3,000 crore. It largely invests in the stocks of leading healthcare and pharmaceutical companies like Sun Pharma, Cipla, etc. With a minimum investment requirement of Rs. 5,000 and a small exit load of 1%, the fund has generated good returns over the past few years.
2. Tata India Pharma & Healthcare Mutual Funds
Introduced 4 years ago by Tata Asset Management Limited, the Tata India Pharma & Healthcare mutual fund is primarily invested in the best national and international healthcare companies. 94% of its corpus is equity based while 6% of it is invested in cash-based instruments. This fund too requires a minimum investment amount of Rs. 5,000. However, it has a low exit load of 0.25%.
3. UTI Healthcare Fund
With 96% of its holdings invested in equities, the UTI Healthcare fund has come a long way since its inception in 1999. Today, it holds assets worth Rs. 500 crore and is tactfully managed by the UTI asset management company limited. Eminent companies like Sun Pharma, Cipla, Dr. Reddy’s etc. constitute a major share of its asset allocations. The fund has an exit load of 1%.
4. SBI Healthcare Opportunities Fund
Active since 2004, the SBI Healthcare opportunities fund holds net assets worth Rs. 1,000 crore. Invested in the equities of healthcare companies, this fund is professionally managed by the SBI Funds Management Private Limited. It has an almost negligible exit load of 0.5% and requires a minimum investment amount of just Rs. 500. For the past 5 years, it has offered returns to the tune of 11%.
5. Mirae Asset Healthcare Fund
Introduced as recently as 2018, the Mirae Asset Healthcare Fund has managed to build up a corpus of approximately Rs. 200 crore in less than a year. 92% of the fund’s corpus is invested in equity stocks with merely 8% being locked in other form of securities. Quite like its counterparts, the fund requires a minimum investment amount of Rs. 5,000 and has an exit load of 1%.
6. DSP Healthcare Fund
The DSP Healthcare fund with a net asset holding of Rs. 150 crore is available for subscription via both, direct and regular routes. The fund requires a minimum investment of Rs. 500 and has an exit load of 1%. Since its launch in late 2018, it has been able to generate consistent returns in the range of 2% to 5%, thus turning it into a highly sought after healthcare savings tool.
7. ICICI Prudential Pharma Healthcare & Diagnostics Fund
Basically an open-ended equity scheme, the ICICI Prudential Pharma Healthcare & Diagnostics fund is relatively new and has been benchmarked to S&P BSE Healthcare. 78% of its corpus is invested in the pharma sector while 2% of its assets are held by public hospitals. The fund requires a minimum investment amount of Rs. 1,000 and has an exit load of 1% only.
8. L&T Tax Advantage Fund
As the name itself suggests, the L&T Tax advantage fund is essentially an equity-linked savings scheme which provides tax efficiency under section 80 (C) of the Income Tax Act. Moreover, it also offers healthcare benefits by means of wealth creation and sectoral investment. The fund requires a minimum investment of Rs. 500 and generates average returns of about 8%.
9. Canara Robeco Gilt Fund
With returns in the range of 3% to 5%, the Canara Robeco Gilt Fund is an open-ended fund which promises capital growth that can be used for health purposes in the longer run. The fund has a minimum investment requirement of Rs. 5,000 and does not charge any money for exit load. Additionally, 82% of the fund’s assets have been allotted to the top five performing sectors.
10. HDFC Monthly Income Plan
Conceived as a hybrid fund, the HDFC Monthly Income Plan has an average return rate of 11%. It is primarily invested in money market and debt-based instruments which enable it to earn a continuous monthly income that can be used to avail numerous healthcare benefits. Like others in its category, this fund too has an exit load of 1% and a minimum investment requirement of Rs. 5,000.
The Way Forward
If you are a millennial who wants invest in the best mutual funds with healthcare benefits, you need to look no further than the top 10 mutual funds offered by OroWealth. Owing to their time tested strategies and state-of-the-art infrastructure, they would be able to help you make a detailed comparison amongst various mutual funds and thereby arrive at a well-informed decision. Mutual funds, after all, are a credible way to create a lasting corpus for all your long-term and short-term health-based needs.