Reliance Pharma Fund

Reliance Pharma Fund is the best performing fund in this category. This fund is being managed by Sailesh Raj Bhan from 2005. He has over 9 years experience in Equity Securities research and analysis. Pharma and healthcare sectors have been doing well and were least affected by the last economic slowdown. This is also a sector with high growth projection for the next 2-3 years. This fund is one of the best performers in this category. You can add this fund to your satellite portfolio. Sector funds like this one should only be part of a satellite portfolio, complementing the core portfolio.

Where does Reliance Pharma Fund invest your money?

Reliance Pharma Fund is a pharmaceutical sector fund which means your money will be invested in large, medium and small sized companies in the pharma industry. Large cap companies tend to be stable compared to mid cap and small cap companies. This fund has 26% exposure to large companies, 50% exposure to medium sized companies and about 24% exposure to small sized companies.

Suitable for what?
  • Creation of wealth
  • Lifestyle needs
Not Suitable
  • Child's marriage
  • Child's education
  • Retirement Plans
  • Home Purchase
How much to invest?

Minimum one time investment is Rs 5000 and minimum SIP is Rs 500 per month. Do not make Reliance Pharma Fund as part of your core portfolio. Core portfolio is investments that are made for your basic goals and makes up about 70% of your investment portfolio. Reliance Pharma Fund can be part of your satellite portfolio. Do not do the mistake of investing in too many mutual fund schemes. At any point of time do not have more than two mutual fund schemes in your core portfolio.

Our recommendation for fresh investment
Recommended
Our recommendation for existing investment
Recommended
How has Reliance Pharma Fund performed in the past?

If you had invested Rs 1 lakh when the fund was launched in June 2004, your value of investments would be around Rs 6.9 lakhs. If you had invested Rs 1 lakh five years back it would have become Rs 2.83 lakhs. The performance has been better or similar to other mutual funds in this category. The fund has been giving at around 23% every year for those who stayed invested for the last 5 years.

Assume you had invested Rs 10,000 every month in Reliance Pharma Fund through SIP for the past 5 years today you would have around Rs 11.07 lakhs.

How will Reliance Pharma Fund perform in the future?

Needless to say no one can predict the future of markets. We have firm belief in the future prospects of the Indian economy. If the Indian economy grows at 9% then the leading companies tend to do well. When the companies do well their stock prices follow their performance. So if you expect the economy to grow at 8% then you can expect top performing mutual funds to give you returns in excess of 14%.

Mutual fund schemes that have exposure to mid sized companies tend to show results when their bet on few companies comes true. We advise you to avoid too much of star gazing and future prediction. Be reminded that equities are one of the asset classes that have the potential to beat inflation. Your aim for core portfolio should be to beat inflation.

When to review?

Once you invest in the fund do not get into the habit of checking the NAV daily or monthly. Review the performance once a year. Too much attention is not good. Keep yourself updated on news related to pharma and healthcare sector to look for warnings that their time to shine is over.

What charges apply?

A onetime fee of Rs 100 is charged on investments over Rs 10, 000 made through distributors. If you are a first time investor in mutual funds an additional Rs 50 is charged to cover KYC expenses. This is deducted from your investment and can be skipped if you buy directly from the mutual fund via their website or offices.

If units are sold within a year an exit load of 1% is deducted from your total returns. No exit load applies for units withdrawn post one year. Expense ratio of Reliance Pharma Fund is 2.71%. This is charged to recover the fund management company’s expenses on securities’ transactions, commissions, registrar fees, etc. Your mutual fund returns will be total returns less expense ratio.

When to enter?

Now! There is no good time to invest rather than now. Do not try to time the market and especially if it is an SIP. Do not follow news channel and other experts trying to know the right time to invest. In the long run it does not matter. Mutual fund is unlike a stock where you are looking at the right price. This job will be done by the mutual fund scheme manager. If you have planned your investments for pharma sector and decided on the amount you want to invest do not think further, just go ahead.

When to exit?

Withdraw when you see the air is out of the sector. Do not remove the money when the markets go up or down in the short term. Do not panic. Stick to your goals.

Tax Implications

The returns in a mutual fund are absolutely tax free, provided you do not withdraw within 1 year. Reliance Pharma Fund does not qualify for sec 80C ELSS benefits.

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