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SBI Pharma Fund

Nature of fund:

Open-ended equity fund.

Investment objective:

The Pharma Fund aims to provide maximum growth opportunities to investors through equity investments in the stocks of companies in the pharmaceutical sector. It comes under the wider umbrella of the SBI Pharma Fund, which comprises a total 5 funds aimed at investing in specific industry segments. Namely – SBI IT Fund, SBI Emerging Businesses Fund, SBI Pharma Fund, SBI Pharma Fund and the SBI FMCG Fund.

As the large population in India is raising the demand for medicine like never before, this fund aims to capitalize on that market movement.

Fund information:

Inception date 14th July, 1999.
CRISIL rank (as in June, 2015) Not ranked.
Plans

•Regular.

•Direct.

Options

•Growth.

•Dividend.

Schemes

•SBI Pharma Regular Growth Fund.

•SBI Pharma Regular Dividend Fund.

•SBI Pharma Direct Growth Fund.

•SBI Pharma Direct Dividend Fund.

Entry load None.
Exit load None.
Minimum investment

•Rs.5,000 (in multiples of Re.1).

•Additional Investment: Rs.1,000 (in multiples of Re.1).

SIP Monthly

•Minimum Rs.1000 (in multiples of Re.1) thereafter for minimum six months.

•Minimum Rs.500 (in multiples of Re.1) thereafter for minimum one year.

Quarterly

•Minimum Rs.1500 (in multiples of Re.1), thereafter for minimum one year.

Product label – Risk and target investors High Risk. Target investors are those who seek:

•Long term growth in investments.

•Growth in investments in equities of the Pharmaceutical sector, for sector specific growth opportunities.

Benchmark SBI Pharma Fund – S&P BSE Healthcare.
SWP Yes.

Monthly

•Minimum of Rs.500 can be drawn.

•Must indicate in the application form or issue advance.

•Can indicate month and year from which SWP should commence and the frequency.

Quarterly

•Minimum of Rs.500 can be drawn.

•Must indicate in the application form or issue advance.

•Can indicate month and year from which SWP should commence and the frequency.

STP Yes
Redemption

•Rs.1,000 or 100 units or account balance (whichever is lower).

•The price will be the Applicable NAV minus Exit Load.

•Redemption proceeds will be dispatched within 10 working days.

Taxation (on investment and on redemption) The tax implications of being associated and invested in this mutual fund must be discussed at length with your tax advisor.

Fund manager

Mr. Tanmaya Desai

Mr. Desai holds a Bachelor’s degree in Engineering (electronics) and an MBA in Finance in addition to being a CFA (USA) Level 3 candidate. He has been associated with SBI Mutual Funds Management in 2008, prior to which he was lecturer in the Electronics Department at DJ Sanghvi College of Engineering, Mumbai. He has over 6 years of experience, 3 of which have been in the Indian capital markets.

Investment philosophy

  • Concentrates investments primarily in the equities of pharmaceutical companies.
  • Provides sector specific growth.
  • To invest 90% - 100% of funds in equities of the pharmaceutical sector.
  • To grow along with the pharmaceutical sector.

Portfolio – Top 10 Holdings

Top 10 holdings of the SBI Pharma Fund as on 31st July, 2015:

Equity Sector Percentage of AUM
Sun Pharma Pharmaceuticals 22.85
Aurobindo Pharma Pharmaceuticals 9.63
Lupin Pharmaceuticals 8.61
Strides Arcolab Pharmaceuticals 8.07
Torrent Pharma Pharmaceuticals 6.86
Divis Labs Pharmaceuticals 6.23
Cadila Health Pharmaceuticals 5.99
Natco Pharma Pharmaceuticals 5.49
Sequent Scienti Pharmaceuticals 4.93
Glenmark Pharmaceuticals 4.01

Risk measures:

Sharpe Ratio 1.69
Alpha N/A
Beta 1.04
Standard deviation 16.8%

Performance

AUM (as on 30th June, 2015) Rs.525.22 crores.
NAV (as on 3rd September, 2015)

•SBI Pharma Regular Growth Fund = 147.9611.

•SBI Pharma Regular Dividend Fund = 110.5028.

•SBI Pharma Direct Growth Fund = 151.7041.

•SBI Pharma Direct Dividend Fund = 124.9531.

Returns and benchmark comparison
Date Scheme returns S&P BSE Healthcare Index
Since Inception (till 31st May, 2015) 20.16% 17.97%
5 year 30.03% 26.52%
3 year 42.87% 37.62%
1 year 76.13% 71.42%
Expenses
Slab rates SBI Pharma Fund expenses as a % of daily net assets
First 100 crores 2.70%
Next 300 crores 2.45%
Next 300 crores 2.20%
Balance Assets 1.95%

Expert view of the fund

As with all sector funds, even this one must be chosen with much caution. If you’re a new investor, skip this fund as there are many other mutual funds which will offer you excellent returns. This pharma-sector fund will invest money in small, medium and large cap companies in the pharmaceutical sector only, and thus will be only affected by market fluctuations in the pharmaceutical sector. With 61.55% exposure to large-cap companies, this fund aims to keep the capital invested safe, but it also has 28.39% exposure to mid-cap companies and 10.05% exposure to small-cap companies which makes it just as volatile. This plan is not suitable if you’re taking it to fund your child’s education or marriage, but it is suitable for wealth creation.

How to apply

You can apply online through the SBI mutual funds website, or alternatively call the SBI mutual funds office and they will guide you through a step-by-step procedure on how to invest. At any stage during your research on the SBI website, scroll to the top right of the screen and you will find a button that you can click on to express your interest in investing in the fund. You can physically walk in to the SBI branch and fill up your KYC forms after which you will be directed on how to invest through the mutual funds investment desk at the branch. There’s a 24/7 dedicated toll free number you can call, and you can also send an SMS showing your intent to invest. All these details of the number to call or SMS can be found on the SBI mutual funds website. You can also contact any one of SBI’s Investor Service Centres.

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Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

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