Pharma funds have been laggards over the past year, with a category average return of a meagre 1.74 per cent. They have also yielded meagre returns of only 4.90 per cent compounded annually over the past five years.
However, experts say these funds can prove to be good contra bets for investors willing to hold them for three-five years. One good reason for investing now is that the negatives are already factored into the prices. Indian companies have got better at handling USFDA strictures.
Moreover, Indian pharma companies are global leaders in generics. One in every three generic pill consumed in the US is supplied by an Indian company. And now they are also venturing into complex generics.