Mutual fund investment has become an appealing opportunity for wealth accumulation. A key advantage of this investment avenue is its accessibility, as individuals can start investing with amounts as low as Rs 100 or Rs 200 through Systematic Investment Plans (SIPs). The power of compound interest, given time to grow, has the potential to turn these modest beginnings into significant financial assets.
SIPs, also known as systematic investment plans, are a popular choice for novice investors entering the mutual fund arena. This structured approach allows investors to regularly contribute small amounts, leading to incremental returns over time without the need for substantial initial investments. The SBI Healthcare Opportunities Fund exemplifies how investors can turn small SIPs into substantial wealth in a span of 25 years.
SBI Healthcare Opportunities Fund
SBI Healthcare Opportunities Fund Direct Plan-Growth is a Sectoral-Pharma mutual fund scheme from SBI Mutual Fund. The SBI Healthcare Opportunities Fund, established in July 1999, has demonstrated outstanding performance, solidifying its position as a top-performing mutual fund in the healthcare industry. Since its inception, this high-risk fund has consistently delivered impressive annual returns exceeding 18%, with a notable 37% return in the previous year alone. With a heavy emphasis on the healthcare sector, comprising 93.23% of its total allocation, this fund remains dedicated to capitalizing on opportunities within this lucrative industry.
In comparison to other funds in its category, the SBI Healthcare Opportunities Fund Direct Plan-Growth has consistently delivered strong returns. While its ability to mitigate losses in a declining market is considered average.
This fund’s investments are primarily in the Healthcare and Chemicals sectors, with a lower exposure than other funds in the same category.
The top 5 holdings of the fund include Sun Pharmaceutical Industries Ltd., Max Healthcare Institute Ltd., Divi’s Laboratories Ltd., Poly Medicure Ltd., and Lupin Ltd. SBI Healthcare Opportunities Fund Regular Growth is managed by Tanmaya Desai, Pradeep Kesavan.
High-risk investment option
The fund is considered a high-risk investment option, ideal for investors seeking higher potential returns despite the increased volatility. In addition to healthcare, the fund also allocates 3.50% to chemicals and materials. The fund’s long-term performance demonstrates the benefits of selecting promising sectors and maintaining a long-term investment strategy, resulting in significant rewards over decades of investment.
If an investor had initiated a monthly Systematic Investment Plan (SIP) of Rs 2,500 at the time of the fund’s inception, the investment would now be worth approximately Rs 1.18 crore. Over a span of 25 years, a total of Rs 7.50 lakh would have been contributed, with the remainder of Rs 1.10 crore earned as returns.
This mutual fund has proven to be highly lucrative for investors who opt for lump-sum investments as well. With an impressive annual return of 17.12%, an initial investment of Rs 1 lakh in the year 1999 would have ballooned to about Rs 55 lakh today. The fund’s consistent performance makes it a top choice for both SIP and lump-sum investors.
Some similar funds are:
ICICI Prudential Pharma Healthcare and Diagnostics (P.H.D) Fund Growth
SBI Healthcare Opportunities Fund Regular Growth
DSP Healthcare Fund Regular Growth
Nippon India Pharma Fund – Growth
Mirae Asset Healthcare Fund Regular Growth
Among these, SBI Healthcare Opportunities Fund Regular Growth stands out with a Sharpe ratio of 1.19 and a standard deviation of 14.27%.