Very few mutual funds manage to stay relevant, consistent and rewarding across market cycles. Even fewer do it within a single sector, where ups and downs are sharper. Nippon India Pharma Fund is one such rare example.
Over more than two decades, this healthcare-focused fund has quietly turned disciplined investing into life-changing wealth.
The fund is managed by Nippon India Mutual Fund, one of India’s leading fund houses. Total AUM of the fund house stands at around Rs 7.2 lakh crore and it runs around 130 schemes across categories (as of January 2026).
Among all its offerings, Nippon India Pharma Fund stands out as the best performer over 20 years, for both SIP and lump sum investors. (Only regular plans are analysed, as direct plans do not have a 20-year history.)
Nippon India Pharma Fund emerges as a long-term wealth creator
Nippon India Pharma Fund – Regular Plan has emerged as the best-performing Nippon India fund over a 20+ year period. On lump sum investments, the fund has delivered around 18.36% CAGR over 20 years. On SIP investments, returns stand close to 18.05% CAGR over the same period.
Since its launch on 5 June 2004, the fund has delivered even stronger numbers over a full 21-year holding period, showing how time and patience amplify returns.
SIP investors saw real magic over 21 years
The biggest story lies in long-term SIP investing. A Rs 10,000 monthly SIP, started 21 years ago, has grown into about Rs 2.38–2.39 crore today. This translates into an annualised return of 18.32%. This clearly shows the power of consistency, compounding and staying invested, especially in a sector that has seen both boom phases and dull years.
Lump sum investors were rewarded even more
For investors who invested early with a lump sum: Rs 1 lakh invested in June 2004 has grown into around Rs 52 lakh in 21 years. The annualised return works out to 20.18% CAGR. This means the investment has grown 52 times, which is exceptional even by equity mutual fund standards.
How the fund compared with its benchmark
Every fund must also be seen against its benchmark. In this case, the benchmark is BSE Healthcare TRI. Over 21 years, the benchmark delivered around 15.77% CAGR, much lower than the fund’s long-term returns. This shows that the fund has added value over very long periods. However, performance has not been smooth in shorter timeframes.
Short- and medium-term underperformance needs attention
In recent years, returns have been mixed:
3-year returns: Fund 21.62% vs Benchmark 24.51%
5-year returns: Fund 14.83% vs Benchmark 15.58%
7-year returns: Fund 19.13% vs Benchmark 18.47%
The fund lagged the benchmark in 3, 5 and 7 years, but: 10-year returns: Fund 13.01% vs Benchmark 10.63%
This clearly highlights one reality — sectoral funds go through phases of underperformance, even strong ones.
Key fund details at a glance
Assets under management (AUM): Rs 8,459 crore
Expense ratio: 1.82%
Launch date: 5 June 2004
Category: Sectoral – Healthcare / Pharma
Risk profile: high returns come with high volatility
This fund is classified as Very High Risk, which investors must clearly understand.
Mean return: 20.90%
Average returns have been strong over time.
Standard deviation: 15.10%
Returns can fluctuate sharply. Volatility is high.
Sharpe ratio: 0.97
Risk-adjusted returns are reasonable, but not extraordinary.
Sortino ratio: 1.49
Downside risk has been managed better than overall volatility.
Beta: 0.91
The fund moves slightly less than the broader market, but still follows market trends closely. In simple terms, this fund can deliver big gains, but investors must be mentally prepared for deep corrections and long flat periods.
Where the fund invests: top holdings
The portfolio is dominated by well-known pharma and healthcare names:
Sun Pharmaceutical Industries Limited – 13.55%
Lupin Limited – 7.59%
Divi’s Laboratories Limited – 6.90%
Cipla Limited – 6.33%
Dr. Reddy’s Laboratories Limited – 5.83%
Apollo Hospitals Enterprise Limited – 5.63%
Vijaya Diagnostic Centre Limited – 3.41%
Ajanta Pharma Limited – 2.90%
Gland Pharma Limited – 2.75%
Thyrocare Technologies Limited – 2.57%
This shows a clear concentration in pharma and healthcare, which works well when the sector performs — and hurts when it doesn’t.
Sectoral funds: benefits and risks investors must know
Sectoral funds like this offer focused exposure.
Benefits:
-Strong upside when the sector is in a growth phase
-Ability to capture long-term structural trends, such as healthcare demand
-Can boost portfolio returns when timed well
Risks:
-High volatility and sharp drawdowns
-Long periods of underperformance are common
-Over-dependence on one sector increases risk
Because of this, sectoral funds should never be the core of a portfolio. They work best as a small satellite allocation.
A word of caution: don’t chase past returns
The headline numbers are impressive, but investors must be careful. Past returns look attractive because healthcare did very well over long periods. Future returns may not be similar. Sector cycles change, regulations evolve, and valuations matter.
Chasing returns after a strong run often leads to disappointment. This fund rewards patience, discipline and long holding periods, not short-term excitement.
Summing up…
Nippon India Pharma Fund is a classic example of how long-term SIPs and early investing can create massive wealth — even within a volatile sector. But it is not for everyone. Only investors who understand sector risk, can stay invested during dull phases, and are willing to look beyond short-term returns should consider it.
Disclaimer: The above content is for informational purposes only. Mutual Fund investments are subject to market risks. Please consult your financial advisor before investing.