Healthcare-related sectors can offer varied growth opportunities to investors because it blends both defensive and cyclical elements. Defensive stocks, such as pharmaceuticals and healthcare facilities, tend to see lower downside risk during economic downturns, as people continue to spend on essential medical needs. On the other hand, certain healthcare segments, like elective procedures and wellness products, show cyclical patterns and are influenced by economic conditions. This combination provides the potential to mitigate volatility risk while still allowing for growth during market upswings.
It is this balance that the Bajaj Finserv Healthcare Fund seeks to capture. The fund seeks to offer long-term growth potential and the ability to navigate market ups and downs through its forward-looking megatrends strategy.
The megatrends shaping healthcare investing
Megatrends are large-scale, long-term forces that shape societies, economies, industries, and cultures over decades. They can influence how people live, work, and interact. Unlike short-term trends or fads, megatrends evolve gradually but have significant and lasting effects.
The Bajaj Finserv Healthcare Fund follows such a megatrend-driven approach. The thematic equity fund invests in pharma, healthcare and allied companies. By focusing on major regulatory, economic, demographic, and social changes in these spaces, the fund seeks to invest in companies that could benefit from these structural shifts. Here are some of the megatrends that the fund focuses on:
. Regulatory megatrends: Governments across the world, including India, are increasing their focus on healthcare policies, insurance penetration, and drug pricing regulations. The push for affordable healthcare and evolving compliance norms can create new opportunities for companies that can adapt to these changes.
. Economic megatrends: Rising income levels, higher disposable income, and increasing healthcare spending are contributing to the growth of healthcare and allied sectors. The shift towards premium healthcare services and investment in healthcare infrastructure can drive demand across different healthcare segments.
. Demographic megatrends: India’s growing population, rising life expectancy, and increasing awareness of lifestyle diseases such as diabetes and heart conditions are driving of healthcare demand. An ageing population is expected to need more medical care, diagnostic services, and long-term treatment options, creating sustained opportunities in healthcare-linked sectors.
. Social megatrends: Awareness about health and wellness is increasing among Indian consumers. More people are seeking preventive healthcare, adopting healthier lifestyles, and investing in wellness solutions. The demand for organic nutraceuticals, fitness products, and traditional medicine is on the rise, creating new investment opportunities.
Opportunities across sectors
As India’s healthcare and related industries evolve, here are the sectors that can potentially offer long-term growth opportunities:
. Pharmaceuticals: The Indian pharmaceutical industry has been on a growth trajectory. The country positions itself as the ‘pharmacy of the world’, supplying medicines to both domestic and international markets. The government is also taking policy measures to encourage innovation and research and development in this space.
. Hospitals and healthcare facilities: Expanding healthcare infrastructure, growing medical tourism, and the rise of corporate hospital chains are creating growth opportunities. Medical infrastructure in India is growing, but there is significant scope for further expansion and increased rural penetration of quality healthcare. These can create long-term growth opportunities.
. Health insurance: The demand for health insurance is growing, but the sector remains underpenetrated. Government initiatives and private sector participation are expanding insurance coverage, making it an area of opportunity.
. Nutraceuticals: The rising focus on preventive healthcare has fuelled demand for nutraceuticals, including dietary supplements, functional foods, and herbal products. India’s rich tradition of Ayurveda and natural wellness practices provides additional avenues for growth.
. Diagnostic laboratories: The diagnostics sector is expanding, with increased demand for pathology and radiology services. Advanced testing technologies, home sample collection, and digital healthcare solutions are driving growth in this space.
. CRAMS (Contract Research and Manufacturing Services): India has emerged as a hub for pharmaceutical contract research and manufacturing, catering to global pharmaceutical and biotechnology companies. Cost efficiencies, skilled talent, and regulatory compliance make this sector suitable for investments.
Why invest in megatrends?
Megatrend investing offers a strategic approach to capturing long-term growth, diversification, and resilience by focusing on transformative global shifts. Here are some of its advantages:
. Long-term growth potential: Investing in megatrends aligns with structural shifts that may drive sustained growth over decades.
. Early-mover advantage: Identifying trends early can help investors tap into their growth potential before the market wakes up to it.
. Resilience to short-term volatility: Unlike cyclical trends, megatrends are driven by fundamental, lasting changes, enhancing their potential for recovery from economic downturns.
. Exposure to innovation: Investing in megatrends can provide access to cutting-edge technologies and disruptive business models.
. Global growth potential: Megatrends like demographic changes, digital transformation, and climate action are global, offering opportunities in different markets.
By leveraging opportunities created by megatrends, the Bajaj Finserv Healthcare Fund seeks to tap into healthcare-related sectors’ structural growth potential. Investors who find this strategy appealing can consider investing in this fund. You can invest via Systematic Invest Plan (SIP) or lumpsum. Investment options start at Rs. 500 for lumpsum and Rs. 500 and above with minimum 6 instalments in case of SIP.