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ICICI Prudential P.H.D Fund: A Smart Approach to Invest in Health Care Theme

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When it comes to investing in healthcare theme, retail investors usually prefer pharmaceuticals sector because they consider it as an ideal investment option to attain generous returns. But in reality, the pharmaceutical sector is merely a subset of healthcare theme. You can imagine the broadness of healthcare space by comparing its broad $7 trillion market size to that of $1trillion market size pharmaceutical sector. Healthcare sector is a collaboration of many different industries – from pharmaceuticals & devices to diagnostics, health insurance, hospitals and each industry has different dynamics. Investment in health stocks offers generous returns to the investors despite the factors affecting stock prices whether an investor chooses large or small companies for investment. Investment in healthcare through mutual funds schemes lowers the volatility of investing in individual stocks by diversifying the holdings from investor’s portfolio.

Healthcare investing needs a smart approach to gain maximum returns after the maturity of a policy. Investors have to understand the underlying drivers including all parameters that affect the performance of a scheme. Investment in a pharmaceutical sector under healthcare theme is also a good decision but before investing in this sector, investors should understand that in India, around 50% of the revenues from generics drugs do comes from exports & many pharma companies were facing downfall because of growth in pricing pressures and rising competing in the market. Despite of the underperformed positions, pharma sector now started showing good recovery against pricing pressures nowadays and there is a good scope for industries in this space to enter and grow in the pharmaceutical market.

ICICI Prudential P.H.D Fund

For those investors, who’re interesting at investing in Pharmaceutical sector, ICICI Prudential Mutual Fund has launched a new sector scheme named “ICICI Prudential Pharma, Healthcare & Diagnostics (P.H.D) Fund.” This scheme is a launched with an approaching target to acquire long-term capital appreciation for investor’s portfolio by investing in diagnostics, health insurance, hospitals, pharmaceutical, preventives and allied sectors. The subscriptions for this new fund offer NFO will start on 25th June and will close on 9th July. According to a report, this scheme will be jointly managed by Mr. Ihab M Dalwai & Priyanka Khandelwal and will give several dividends as well as growth options to the investor. This mutual fund scheme will allow investors to participate in core non-discretionary healthcare sectors on the basis of diversified holdings. As per the expectation, like other healthcare themes mutual fund investment options, this NFO will offer generous returns to sophisticated investors having a high-risk appetite and intimate knowledge about the sector.

Features of ICICI Prudential P.H.D Fund

Following are the attractive features for the investors:

  • Opening Date: 25th June 2018
  • Closing Date: 9th July 2018
  • Availability: Available in direct plans & regular plans .This scheme is applicable for SIP and lump sum options.
  • Plan offers: It will give dividend and growth options to the investors.
  • Minimum Lumpsum Investment:- Rs 5,000 and in multiples of Rs 1,000
  • Minimum SIP Investment: Rs 1,000 per month and minimum SIP tenure is 5 months
  • Minimum SWP: Set to Rs 500.
  • Maximum Investment: No limit set for investors in this NFO.
  • Net Asset Value: Rs 10 per unit for initial subscribers.
  • Scheme will reopen for subscribers from 17th July, 2018.

How funds will be allocated in this NFO?

Funds are allocated by a fund manager on the basis of risk appetite of an investor. If an investor is ready to bear high risk then his fund manager invest 80% to 100% in Equity & Equity related instruments of diagnostics, healthcare, pharma & other allied companies. Contrary to this, if investor risk profile is medium/low then fund manager will invest only 0 % to 20 % either in Equity related instruments of other sectors or in units of Mutual Fund scheme.

Broad Investment Themes of ICICI Prudential P.H.D Fund

This fund will invest in majorly 3 main sectors viz. Remedial Healthcare, Preventive and Health Insurance.

Remedial Healthcare: - This theme also has subsectors like hospitals, diagnostics, and Pharma. In Hospitals, the growth potential is likely to be driven by taking the factors like the severe demand-supply mismatch, rising sedentary diseases or stress levels with increasing pollution level & availing quality hospital facilities for overseas patients into consideration. Investors will also attain good return by investing in current Indian diagnostic industry which is booming at a CAGR 15% due to increased awareness of evidence-based treatment & preventive health care among the medical communities. Investment in Pharma sector will also deploy serious investors with a high-risk appetite to gain maximum returns with this scheme as India is currently accounting for approximately 10% of global production volumes and may drive more growth due to excessive investment in R&D pharma companies & domestic pharma business.

Preventive Sector: - With increased alertness and consciousness for health, the demand for dietary supplements in India also has raised a lot because consumers believe that such supplements will offer balanced nutrition to them. Investors will definitely attain maximum return by investing in Preventive Sector using P.H.D fund because the nutritional care segment will grow at 12% CAGR or even more before 2022.

Health Insurance: - Investment in Health insurance industry is the prominent investing decision for an investor because of its fastest growth performance in the last 10 years. Health insurance sector is also expected to acquire faster health growth in future too due to aspirations of high-quality healthcare, high healthcare inflations & other parameters.

Conclusion

ICICI Prudential NFO for P.H.D funds will be an attractive& defensive theme for serious investors and is not likely to be affected by economic cycles and will give attractive returns to the investor even under unfavorable market fluctuations. Investors do have good investment opportunities by investing in the sub-sectors covered in healthcare theme & pharmaceutical sector. This NFO will be an ideal choice for investors looking for investment in long investment horizon (at least 3 to 5years). To know more details about this NFO scheme and to gather information you should consult your financial advisor before investing.

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Mr. Ajay Kumar Jain, M.Sc, Chairman And Managing Director
Being the Chairman And Managing Director, he focuses on holistic investment planning and wealth management and tries to make investment planning simpler for retail and HNI investors. Investor education is one of the prime things that Mr. Ajay Jain focuses on as he believes financial education is the foundation of successful investing. With over two decades of experience, Mr. Jain has made a mark in the Indian mutual fund industry due to his compassion and sheer hard work.

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