Aditya Khemka, fund manager at DSP Investment Managers, spoke to CNBC-TV18 about market fundamentals, outlook on pharma sector, and also talked about a new healthcare fund launched by DSP.
Talking about the new pharma fund, Khemka said, “This fund we are launching is called the DSP Healthcare Fund. We have primarily got three pivots of the characteristics of the fund that I want to discuss. Firstly, it is on the asset allocation side so to begin with we would largely be more small and midcap oriented and would have lesser largecaps in the fund. That is because we see higher pockets of value, more pockets of value emerging in the small and midcap space driven by the recent correction in some of these stocks. Also we see that quality of earnings in some of these small and midcaps is very solid and robust and is continuing to grow at a decent pace as we look ahead. We will be more focused on such names of such focus of value where we see that investors can make very good returns over a period of time as the business continues to grow.”
Khemka added, “The second proposition is that we are going to invest up to 25 percent of the corpus of the fund in foreign securities. For now we are looking at the US market. Lastly, on our allocation of healthcare versus pharmaceuticals to begin with we will be more healthcare oriented than pharmaceuticals oriented. We will have 40-50 percent of the portfolio maybe invested in healthcare stocks. We see that Ayushman Bharat Yojana for example can add a very meaningful trigger to the overall growth that we expect from this sector in the coming 5-10 years. That has what got to launch this product at this point in time.”
When asked whether he is not bullish on traditional generic pharmaceuticals growth, he said, “What we are saying is that the growth in the healthcare spaces seems to be more secular, less volatile, and more sort of around the pivot then the pharmaceuticals space. So, pharmaceuticals space tends to have volatility in the growth driven especially by the export markets, the US market, the European market etc. whereas the healthcare industry begin inward looking is just more secular in terms of how it grows. We are trying to say there is more pocket of value in that space.”
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