Pharma funds have always given a huge outperformance over the Sensex in the long and the short-term. Why is that? Would you recommend these funds to investors?
-Rochelle
Pharma is a non-cyclical sector that has done well over the past 5 years, at a time when the broad markets have struggled. The good returns generated by pharma funds in the past 5 years have boosted their long-term performance as well.
However, mutual fund investors can do without pharma funds because most diversified equity funds have exposure to this sector. You should consider investing in a pharma fund only if other funds in your portfolio are not adequately exposed to this sector.
This article was originally published on November 08, 2012.
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