Healthcare Fund: A Big Boom in Investment

India has made significant strides in the Healthcare sector. With a rich history of using natural herbs since ancient times, the country has seen remarkable evolution. Right from the use of traditional practices like Ayurveda to the adoption of Western medicines, the Indian Healthcare sector has witnessed exceptional growth. In the past few decades, India has emerged as a preferred medical tourism destination of the world. It has emerged as the top 6 medical value travel destinations in the world. Medical tourism is the practice of traveling abroad to obtain medical treatment. Approximately 2 million patients visit India each year from 78 countries for medical, wellness and other related treatment. In 2022, India's medical tourism sector was estimated to be worth $9 billion. Such booming sector needs focus and the required funding and attention to grow further to its potential.

Srinivas Tutturi, Founder of Sri Investments

Healthcare & Wellness after COVID 19

The pandemic has served as a turning point in altering people's perception towards health and wellness. Individuals started prioritizing health, with an emphasis on not only self-care but also physical as well as mental fitness. As per the recent study by Bajaj Finserv AMC, post COVID 19, the private healthcare sector has surged significantly. While the hospitals market grew from $62B (2020) to $132B (2023), the Fitness industry is expected to grow at 27% CAGR, reaching $12B by 2025. Led by the organizations like the Serum Institute & Bharat Biotech, the pharmaceuticals sector has positioned India as a global vaccination hub.

Growth in the Appeal of Healthcare Mutual Funds

Healthcare sector stands out as one of the most appealing investment areas for investors. With advancements in medical technology and the growing demand for healthcare services, investors have started realizing the potential growth through investing in such mutual funds. These schemes focus on healthcare related industries consisting pharmaceuticals, biotechnology, medical devices, healthcare services, and health insurance companies.

As per the data from Morningstar, healthcare mutual funds have shown resilience with the sector providing stable returns across different time horizons. Over the past decade, the annual average return healthcare mutual funds have been around 13%, surpassing the returns of other various sectors such as technology and consumption.

Investment Opportunities

Due to its demand driven by various factors consisting of aging populations, emerging diseases, and technological advancements, healthcare is one of the strongest sectors. The development in the pharmaceuticals and biotechnology sector especially with the increase in making of new drugs, vaccines, and therapies has provided ample opportunity to investment in healthcare sector.

One of the major takeaways in this sector can be considered the advancement of new medical devices and enhancement of robotic surgery systems, diagnostic devices, and wearables which provides promising opportunities for investors in healthcare mutual funds.

With the increase in the number of people seeking insurance plan due to the rising cost of healthcare, there has been a significant boost to the growth of insurance market. Thus, making healthcare sector a lucrative segment for investors.

Basis the analysis by The Economic Times, the performance of pharma and healthcare funds have topped offering the highest average return of around 38.05% in 2024.

In conclusion, healthcare mutual funds are an appealing option for long-term growth and stability for investors. By investing in such schemes, individuals are not only benefiting themselves but also contributing towards the innovations which has the power to shape the future of the healthcare industry.