Top MFs: Mirae Asset Healthcare Fund

Objectives

Mirae Asset Healthcare Fund is a sectoral-pharma mutual fund scheme from Mirae Asset Mutual Fund.

The scheme seeks to generate long term capital appreciation through investing in equity and equity related securities of companies benefitting directly or indirectly in Healthcare and allied sectors in India.

Fund Highlights

This fund has been in existence for 3 yrs 7 m, having been launched on 11/06/2018. Mirae Asset Healthcare Fund has ₹1,935 Crores worth of assets under management (AUM) as on 31/12/2021 and is medium-sized fund of its category.

The fund has an expense ratio of 0.49%, which is less than what most other Sectoral-Pharma funds charge.

It attracts an exit load of 1% if redeemed within 1 year

Minimum investment required is Rs 5000 and minimum additional investment is Rs 1000. Minimum SIP investment is Rs 1000.

It is benchmarked against null.

Returns

Mirae Asset Healthcare Fund returns of last 1-year are 21.57%. Since launch, it has delivered 26.65% average annual returns. The fund has doubled the money invested in it every 2 yrs.

Its trailing returns over different time periods are: 31.28% (1yr), 31.13% (3yr) and 28.1% (since launch). Whereas, Category returns for the same time duration are: 23.54% (1yr), 26.3% (3yr) and 13.03% (5yr).

Sector and stock wise exposure

The fund has the majority of its money invested in Healthcare, Chemicals, Insurance, Financial sectors. It has taken less exposure in Healthcare, Chemicals sectors compared to other funds in the category.

The fund's top 5 holdings are in Sun Pharmaceutical Inds. Ltd., Dr. Reddy's Laboratories Ltd., Apollo Hospitals Enterprise Ltd., Divi's Laboratories Ltd., Cipla Ltd..

While the top 10 equity holdings constitute around 66.27% of the assets, the top 3 sectors constitute around 98.29% of the assets.

The fund largely follows a Blend oriented style of investing and invests across market capitalisations - around 58.92% in giant & large cap companies, 34.68% in mid cap and 6.4% in small cap companies.

Tax Implications

1. Gains are taxed at a rate of 15% (Short-term Capital Gain Tax - STCG) if units are redeemed within 1 year of investment.

2. For units redeemed after 1 year of investment, gains of upto Rs. 1 lakh accruing from those units in a financial year shall be exempted from tax.

3. Gains of more than Rs. 1 lakh will be taxed at a rate of 10% (Long-term Capital Gain Tax - LTCG).

4. For Dividend Distribution Tax, the dividend income from this fund will get added to the income of an investor and taxed according to his/her respective tax slabs.

5. Also, for dividend income in excess of Rs 5,000 in a financial year; the fund house shall deduct a TDS of 10% on such income.

Fund manager

Mirae Asset Healthcare Fund is managed by Vrijesh Kasera (Since Jun 11, 2018).

Expert comment

The scheme has at least 80% investments in Pharma, Healthcare and allied sectors.

Healthcare is an evolving theme which has tremendous growth potential and includes businesses in hospitals, diagnostics, specialty chemicals, medical equipment, insurance and other allied sub sectors. The endeavor is to maintain a concentrated portfolio of 30-40 stocks in this theme.

The suggested investment horizon of investing is >3 years.

The scheme's ability to deliver returns consistently is higher than most funds of its category. Its ability to control losses in a falling market is above average.