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Equity: Sectoral-Pharma

by Shubham Satyarth Feb 07, 2025

What is it?


Sectoral funds invest in the stocks of a particular sector. So pharma sectoral funds will invest the majority of the funds in pharma-related stocks. As per the SEBI guidelines, a minimum of 80% of the funds will be invested in pharma-related stocks.


Objective


The objective of these funds is to generate maximum returns by focusing on the pharma sector.


Suitability and opinion


These funds are suitable for high-risk investors. We believe concentration risk is very high in any sectoral funds and the impact of the market cycle can be severe in this category. This category is suitable for informed investors who are bullish on the pharma sector. You should have a solid understanding of the sector before you invest in such funds. Also, entry and exit timings matter in sectoral equity funds, so we can not define the ideal time horizon for any particular sectoral fund. You should not allocate more than 10% of your portfolio to any sectoral funds.

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