NFO Pick – (Bandhan Healthcare Fund)

6 Oct 2025 , 11:46 AM

WHAT CONSTITUTES HEALTHCARE FUNDS

Healthcare funds in India have a wide array of choices to invest in. There is the traditional pharma sector, which includes bulk drugs, active pharma active ingredients (APIs), Value added APIs, and formulations. Other emerging opportunities are the manufacture of medical equipment and contract manufacturing or CDMO. The other big opportunity is the hospitals space, which has become largely an organized sector business now.

The third aspect of the healthcare space that has emerged in the last few years is the diagnostics centres. These include centres that undertake basic tests to advanced tests and are also either affiliated to hospitals or are recognized by the hospitals. Healthcare Funds are not too cyclical in their performance, as they tend to be defensive and also aggressive in select phases of the cycle. That makes them reliable wealth creators over the long run.

WHY INVESTORS MUST OPT FOR A HEALTHCARE FUND?

There are several advantages in opting or a healthcare fund.

• For any aggressive portfolio, the healthcare fund offers the much-needed defence mechanism and the diversification to the portfolio.
• Healthcare companies offer a good mix of large caps, mid-caps and small caps. They also offer options across products and services as well as legacy and growing businesses.
• Indian government has been encouraging the pharma sector with PLI schemes, while medical tourism remains a big attraction for Indian healthcare sector.
• While timing healthcare funds may be tough, an SIP approach can combine the best benefits of healthcare and the benefits of rupee-cost averaging.

Let us turn to how healthcare funds have performed over different time frames!

HOW HEALTHCARE FUNDS PERFORMED IN INDIA

Healthcare Funds in India manage ₹32,196 Crore AUM across 17 funds; with 9 funds having 5-year track record. Here we have only looked at the active healthcare funds and not considered the passive healthcare index funds. Here are the top-9 active healthcare funds based on 5-year CAGR returns (Direct Plans).

Scheme Name	1-Year (%) Returns	3-Year (%) Returns	5-Year (%) Returns	Daily AUM (₹ in Crore)
ICICI Prudential (P.H.D.) Fund	1.75	28.24	20.68	6,305.94
SBI Healthcare Opportunities Fund	1.75	26.15	20.24	3,968.65
Tata India Pharma & Healthcare Fund	-1.48	23.76	18.98	1,306.08
DSP Healthcare Fund	-3.22	24.38	18.69	3,108.31
Mirae Asset Healthcare Fund	-1.31	21.97	18.53	2,783.40
UTI Healthcare Fund	-0.24	25.35	18.37	1,108.72
Nippon India Pharma Fund	-3.17	22.15	18.25	8,197.53
ABSL Pharma & Healthcare Fund	-4.04	22.71	16.60	837.80
LIC MF Healthcare Fund	-0.29	20.64	14.90	86.22

Data Source: AMFI

Small-Cap Funds generated average 1-year return of -1.14%, 3-year CAGR returns of 23.93%, and 5-year CAGR returns of 18.36%. Healthcare have done extremely well in recent times on the back of a bigger opportunity matrix as well as defensive choices. Return dispersion is low over longer time durations, and that is an advantage to investors.

GLANCE AT BANDHAN HEALTHCARE FUND

Here are key details of the Bandhan Healthcare Fund.

• NFO opens on November 10, 2025 and closes on November 24, 2025. This open-ended Fund will invest in a portfolio of pharma, healthcare, and diagnostics stocks in India.
• On the risk-o-meter, Bandhan Healthcare Fund is classified as “High Risk,” due to its substantial exposure to equity and the underlying thematic risk of healthcare sector.
• Bandhan Healthcare Fund is best suited to investors looking at long term wealth, via an aggressive exposure to the fast-growing and high-potential healthcare sector.
• The benchmark for the fund will be the BSE Healthcare TRI. Viraj Kulkarni and Brijesh Shah will be the designated fund managers.
• Minimum application amount in NFO is ₹1,000 and in multiples of ₹1 thereof. The fund is amenable to SIPs, STPs, and SWPs.
• An exit load of 0.5% will be imposed if the fund is redeemed funds within 30 days of the date of allotment. There will be no exit load imposed after the 30-day period.

Bandhan Healthcare Fund will be classified as an equity fund for tax purposes. Short term capital gains (STCG) will be taxed at 20.8% (including cess). Long term capital gains (LTCG) will be taxed at 15%, after a base tax-free LTCG limit of ₹1.25 Lakhs per fiscal year.