SBI Healthcare Opportunities Fund

It holds a portfolio of pharmaceutical and other healthcare companies with high potential growth prospects, healthy financial strength, sustainable business models and affordable pricing that offers promise for wealth creation.

The Fund has 100% investment in Indian stocks, of which, among other things, 85.64% is in pharmaceutical stocks and 12.09% in healthcare services stocks. The fund objective is to generate alpha through superior stock selection.

SBI Healthcare Opportunities Fund is available in four plan categories:

• Direct - Growth
• Direct - IDCW 
• Regular - Growth
• Regular - IDCW  

In the case of Direct Plans, the investors acquire mutual fund units directly from the Fund. However, for Regular Plans, the investors have to acquire mutual fund units through distributor agents. 

Investment Details 

Fund Summary

1. SBI Healthcare Opportunities Fund Direct Plan-Growth

   • Risk level-Moderate
   • NAV-Rs. 225.6968 as of 26.05.2021
   • Expense Ratio-2.27%
   • Fund Started-05.07.1999

2. SBI Healthcare Opportunities Fund Direct Plan IDCW 

   • Risk level-Moderate
   • NAV-Rs. 142.1773 as of 26.05.2021
   • Expense Ratio-2.27%
   • Fund Started-05.07.1999

3. SBI Healthcare Opportunities Fund Regular Plan-Growth

   • Risk level-Moderate
   • NAV-Rs. 247.2792 as of 26.05.2021
   • Expense Ratio-1.09%
   • Fund Started-01.01.2013

4. SBI Healthcare Opportunities Fund Regular Plan IDCW 

   • Risk level-Moderate
   • NAV-Rs. 171.8043 as of 26.05.2021
   • Expense Ratio-1.09%
   • Fund Started-01.01.2013

   Fund Manager

   • Mr Tanmaya Desai (since January 2011)

Fund Returns Summary

SBI Healthcare Opportunities Fund Direct Plan-Growth - Returns Summary

SBI Healthcare Opportunities Fund Direct Plan IDCW - Returns Summary

SBI Healthcare Opportunities Fund Regular Plan-Growth - Returns Summary

SBI Healthcare Opportunities Fund Regular Plan IDCW - Returns Summary

Summative Pros and Cons Table

Benefits of SBI Healthcare Opportunities Fund

Investment in SBI Healthcare Opportunities Fund can be beneficial to the investors for the following reasons:

• Opportunities across the Healthcare value chain: The opportunity to invest in the healthcare sector encompasses companies across the healthcare value chain, including pharmaceuticals, hospitals and diagnostic companies. The Fund invests in pharmaceutical stocks that have a presence in India and some of the heavily regulated markets such as the USA, Europe, Brazil, Russia, South Africa, etc. The Fund can potentially invest in contract manufacturing companies that tie-up with the more prominent pharmaceutical companies focused on research and development. The Fund can invest up to 35% of the fund corpus in international healthcare companies.
• Successful Track Record: A positive track record of more than three decades and a humungous experience of investing through various business cycles makes SBI Mutual Fund a very reliable Fund House. With a bottom approach to investing, the fund managers invest in companies having a reliable background, resilient fundamentals, top quality management quality and healthy financial strength.
• Positive Outlook: The healthcare sector's short-term outlook is healthy on account of the COVID-19 pandemic. This is further boosted by PLI incentives (e.g. API parks) provided by the central government on the Active Pharmaceutical Ingredients (API) sector. It is expected that countries will increase healthcare spending in absolute amounts and as a percentage of GDP in the near future. This brings a lot of attractive business prospects to listed companies in the healthcare space.
• Export Opportunity: India is likely to be a beneficiary of the ‘China plus One’ story as global pharmaceutical supply chains diversify their dependence on China. The shift of business from China to India, albeit gradual, will provide a significant opportunity for Indian companies to benefit from. This offers considerable scope for Indian companies in the healthcare sector to increase their revenue from exports.

Fund House Details

SBI Healthcare Opportunities Fund is housed under SBI Mutual Fund. It is established as a Trust, with the Trustee of the Fund being SBI Mutual Fund Trustee Company Private Limited. SBI Funds Management Private Limited is the SEBI-approved Investment Manager to the Schemes of SBI Mutual Fund. 

SBI Mutual Fund is sponsored by SBI or the State Bank of India. It boasts of being the largest Bank in India and has 63% shareholding in the Fund House. AMUNDI Asset Management holds the remaining 37% through the child subsidiary, Amundi India Holding. The Fund has a diverse product offering of more than 60 debt and equity investment schemes in its product basket. Fund managers manage the various fund schemes under Mr Rajeev Radhakrishnan (CIO – Fixed Income) and Mr R. Srinivasan (CIO – Equity).

Sponsor details of the Fund House are:

1. State Bank of India: 63% holdings

   Mumbai based State Bank of India (SBI) is India's largest PSU bank. With total assets of Rs. Forty-five thousand three hundred forty-four billion at March 31, 2021, is a market giant and reliable Bank. The SBI has a massive branch network of more than 22,000 banks and 58,500 ATMs across India. Its market share is 25% of total loan and deposits and 23% by assets. SBI is ranked 43rd in the world amongst the banks in terms of size.

2. Amundi India Holding: 37% holdings

   Amundi India Holding is a completely owned subsidiary of Amundi Asset Management, France. It is one of the 10 most giant investment managers by assets under management in the world. It is also the second-largest asset manager in Europe, with €1.729 trillion of AUM or assets under management, as reported in December 2020.

Who Should Invest in SBI Healthcare Opportunities Fund?

SBI Healthcare Opportunities Fund, being a thematic fund, is best suited for investors who seek: 

1. Healthcare Sector Opportunities

    The Fund is a thematic fund formed to generate long-term capital growth by investing in a diversified portfolio of equity and equity-related securities across the healthcare value chain, including pharmaceuticals, hospitals and diagnostic companies. Equity funds, inherently, are meant for long-term wealth creation, and one needs to stay invested in equity for a period over five years. Nevertheless, investors may seek expert opinion from their advisers before investing in a thematic fund, keeping in mind its suitability to its financial goals.

2. Long Term Wealth Creation

   The Fund is categorized as ‘high risk’ and would be prone to a prolonged downtrend in NAV in periods of slowdown. Hence, it is suited for investors who are willing to wait for the long haul. Thematic funds are very successful only in some years and tend to be a flavour of the season in these years. It is suggested to exercise abundant caution while opting for investment in such types of thematic funds. An investor should limit the investment in theme-based funds such as SBI Healthcare Opportunities Fund to 5%-10% of the equity portfolio.

Conclusion

India’s pharmaceutical sector has been a prime export earner for the country, alongside the information technology sector. The future medium-term outlook of the sector seems bright because of the focus of many governments to increase their healthcare spending. An investor may allocate not more than 5%-10% of one's equity funds to this thematic Fund.

FAQ's