Mutual Funds Bank On Healthcare And Pharma Amid Volatility
- By Kotak News Desk
- 18 Mar 2026 at 3:38 PM IST
- Market News
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Data shows that fund houses are inclining towards healthcare and pharma stocks. Experts attribute defensive positioning of these sectors as major growth drivers behind the trend.
Domestic mutual funds are raising exposure to healthcare and pharma stocks. Data shows 15 out of 21 fund houses, or 71%, are overweight on healthcare versus their benchmarks. Healthcare accounted for 7.3% of total mutual fund portfolios in February 2026.
It is now the fourth-largest sector allocation after private banks, automobiles and capital goods. The allocation has risen steadily month-on-month. This suggests continued buying even as broader markets remain under pressure.
Pharma Outperforms In Weak Markets
The recent index performance has supported this shift. Note that the Nifty Pharma index has held up better than the Nifty 50 during the recent market decline. Over the past month, the Nifty Pharma has been up by 0.2%. On the other hand, the Nifty 50 is down 8.9%.
Fund Houses Increase Allocation
Data reveals that several mutual fund houses have raised their exposure to healthcare and pharma stocks (see table)
Invesco Mutual Fund | About 13% |
Axis Mutual Fund | Close to 10% |
Canara Robeco Mutual Fund | Close to 10% |
Motilal Oswal Mutual Fund | Close to 10% |
HSBC Mutual Fund | Above 9% |
According to experts, the rising exposure to healthcare and pharma by mutual funds is due to the fact that they are an evergreen sector that could grow faster than GDP. They also point out that pharma tends to act as a defensive play during uncertain times.
Risks Persist Across Sub-Segments
Despite allocations, risks remain across segments within healthcare and pharma. Hospitals face the possibility of regulatory caps and rising competition in some regions. Domestic pharma companies could see pressure from wider use of generics. Also, export-focused firms remain exposed to regulatory actions and compliance risks, especially in the US market.
Also Read - India Faces LPG Concerns as Consumption Drops 17% In March
Signals Going Ahead
Rising allocations in healthcare and pharma show mutual funds are turning to healthcare for stability as markets remain uneven. The trend shows a shift towards sectors with steady earnings and lower volatility. For investors, the move signals the preference for defensive positioning. This, even as risks in exports, regulation and competition remain across segments.
Sources
Moneycontrol
News 18
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