Turnaround sector

CATEGORY WATCH: PHARMA FUNDS

Percentage (%) Large Cap21.13  Mid Cap50.14  Small Cap28.27  Not Classified0.46  However, in the last one year, it has started to emerge as a good performer. In fact, the last quarter has been impressive as it has preformed better than the other categories. Despite having a small base of funds, the pharma funds are topping the charts with their recent performance.  FRANKLIN PHARMA
Launch: March 1999
Fund Style: Midcap Blend
 

Performance Review
	YTD	2007	2006	2005
Fund	-5.13	5.75	13.86	17.36
Category Average	-9.39	20.09	13.81	25.16
BSE Healthcare Index	-3.25	16.52	21.74	1.84

 A very stable fund, which on occasion, gets aggressive in its portfolio. The fund typically has a portfolio of 18-20 stocks and often takes concentrated bets.  Like other pharma funds, this fund also started as large-cap, but gradually shifted towards mid-cap stocks. The rise in interest in the small-cap stocks has led to returns, which is the best in the category, at 29 per cent.  JM HEALTHCARE SECTOR
Launch: June 2004
Fund Style: Midcap Blend 

Performance Review
	YTD	2007	2006	2005
Fund	-1.70	11.24	16.10	16.49
Category Average	-9.39	20.09	13.81	25.16
BSE Healthcare Index	-3.25	16.52	21.74	1.84

 An average performer, yet great at bucking the trend. Though this has been the case historically, it has also been reasertained recently when the fund fared well in the dwindling markets since the beginning of this year.  While the category fell by 9.4 per cent and the index by 3.3 per cent, the fund experienced a fall of just 1.7 per cent. The fund maintains a focused portfolio averaging around 15 stocks. It may not offer astounding returns, but at least, it offers a shield when the market is unfavourable.  MAGNUM PHARMA
Launch: July 1999
Fund Style: Midcap Blend 

Performance Review
	YTD	2007	2006	2005
Fund	-15.67	6.74	12.63	44.41
Category Average	-9.39	20.09	13.81	25.16
BSE Healthcare Index	-3.25	16.52	21.74	1.84

 A concentrated fund with an average 75 per cent of its assets in top five holdings, Magnum Pharma has been the best performing fund in the category in 2003, 2004 and 2005. After this, the fund's performance slipped.  Though the fund is dedicated to the pharma, it has often drifted to few stocks in other sectors too like automobile, consumer non-durable, financial services and technology. The fund took advantage of the upward rally in the technology sector in 2005 and is also increasing its exposure to small-cap stocks.  RELIANCE PHARMA
Launch: May 2004
Fund Style: Smallcap Growth 

Performance Review
	YTD	2007	2006	2005
Fund	-19.95	49.80	16.73	29.40
Category Average	-9.39	20.09	13.81	25.16
BSE Healthcare Index	-3.25	16.52	21.74	1.84

 The biggest pharma fund has been a consistent outperformer in the category since its launch. Among pharma funds, Reliance Pharma has highest allocation to small-cap stocks, which makes its more volatile.  Therefore, when it soars, it performs much better than the benchmark and when it tumbles down, its retuns fall drastically. The fund's portfolio has been stable with its buy and hold strategy, unlike other equity funds in this category. Despite having a mandate to be fully invested in debt or cash, it has not made any significant shift in the recent turmoil.  UTI PHARMA & HEALTHCARE
Launch: June 1999
Fund Style: Midcap Blend 

Performance Review
	YTD	2007	2006	2005
Fund	-4.51	12.08	8.25	16.02
Category Average	-9.39	20.09	13.81	25.16
BSE Healthcare Index	-3.25	16.52	21.74	1.84

 An erratic performer that keeps beating and getting beaten badly by the benchmark regularly. The fund has been almost stayed fully invested in a fairly stable set of pharma stocks.  On an average, the fund's portfolio has about 20 stocks. Though the fund primarily invests in pharma stocks, it has taken small exposures in IT and other sectors as well. Despite the inconsistent performance, its five-year returns have been a handsome 27 per cent. Though not an opportunistic pharma play, the fund could be nice choice for a long-term pharma portfolio.