Want To Bet Big On Healthcare Sector? Here Are Top Healthcare Mutual Funds With 30% Returns in 3 Years

Top Mutual Funds in India: Investors who are looking to invest in certain sectoral themes like healthcare, IT, infrastructure, etc, without running behind a handful of stocks can consider pumping their money in sectoral or thematic mutual funds. Healthcare thematic funds have given a maximum of 30% of returns in last three years, according to the Association of Mutual Funds in India (AMFI) data.

What Are Thematic Mutual Funds?

According to AMFI, thematic funds are a type of MFs that are focused on specific themes or trends like clean energy, technologies, etc. Unlike equity, debt or value-based mutual funds, these thematic funds focus on specific themes and sectors.
These mutual funds invest in companies that are related to the specific theme and aim to capitalise on growth opportunities and generate returns for investors. Major themes for such mutual funds are dividend yield, PSU, MNC, energy and consumption, etc. WHeras, manufacturing, quant, commodities, services, transportation, healthcare are other themes for such mutual funds.

Top Performing Healthcare Thematic Mutual Funds

Several healthcare sector themes mutual funds have given more than 25% returns in last three years. Which means these sectors are performing well even after the COVID-pandemic era. Continued focus on healthcare infrastructure in India and emphasis on R&D have always kept investors interested towards these sectors. Here are top performing thematic mutual funds in the healthcare sector, according to AMFI data as on 24 June, 2025.

Benefits of Thematic Mutual Funds

Thematic mutual funds mainly aim to offer investors an opportunity to gain exposure to a targeted theme with high-growth potential, like healthcare. However, investors should carefully evaluate the risks and potential rewards of investing in thematic mutual funds, warns AMFI.

Diversification

Investors seeking diversification may find thematic funds appealing. These funds invest in a range of companies linked to a specific theme, which helps spread risk and avoid over-concentration in one company or sector. This diversification can be advantageous for managing potential losses.

Personal Values

Thematic funds also allow investors to align their investments with personal values or beliefs. For example, individuals prioritising social responsibility might choose funds that invest in companies focused on social impact. This alignment can make investing more meaningful for some people.

Long-Term Potential

The potential for long-term returns is another attraction of thematic funds. If a particular industry or sector performs well over time, these funds might outperform the broader market. However, it's crucial for investors to assess their risk appetite and thoroughly review all scheme-related documents before investing.

Thematic Mutual Fund Risks

Such mutual funds can be more volatile compared to the main stocks in the sector. In many cases they can underperform depending on the concentration of risk involved or factors impacting their performance.

Concentration

Another major concern is concentration risk, as these funds focus on a particular sector or theme. If the chosen theme does not perform well or faces regulatory challenges, it can greatly affect the fund's returns.

Volatility

Volatility is another factor to consider when investing in thematic funds. Due to their concentrated exposure, these funds tend to be more volatile than diversified ones. This volatility can result in significant fluctuations in returns, making them unsuitable for those with low risk tolerance.

Liquidity Risk

Liquidity risk is an additional consideration with thematic funds. Some of these funds invest in small-cap or mid-cap stocks, which may lack sufficient liquidity. This can pose challenges when trying to exit investments during market volatility or unfavourable conditions.