While there are a number of specialised funds such as the Axa Framlington Health, Axa Framlington Biotech and the Schroder Medical Discovery funds that provide direct access to the pharma and biotech sectors, Meera Patel, senior analyst at Hargreaves Lansdown says it is also worth considering more generalist funds such as Mr Woodford's and Income Funds, which - more than 25 per cent of both portfolios.
"Given the uncertainty in markets, I would prefer to have a broader diversification and feel an investment via a more generalist fund such as Invesco Perpetual High Income and Income Funds are a good way to get exposure to the sector," she says.
Patrick Connolly of AWD Chase de Vere wealth managers echos her views, saying that he is not keen on the additional risks of specialist funds, and believes for most investors a better approach may be to access the attractiveness of high yielding pharmaceuticals stocks through . managed by Bill Mott holds 19 per cent in healthcare with holdings in eight pharmaceutical companies, while Artemis Income has 14 per cent and BlackRock UK Income 11 per cent in the sector. Other fund managers positive on the sector, according to investment analyst Glyn Williams, include Chris White, who heads up Premier's income funds, and Iain Stewart, manager of the Newton Real Return Fund.
On the investment trust side, there is the Worldwide Healthcare and Biotech Growth Funds run by New York-based OrbiMed Capital. Both are described as "cheap and good performers" by Mr Peters. At the time of writing, Worldwide Healthcare and Biotech Growth Funds were on a discount of 8.4 per cent and 8.5 per cent, respectively. Another favourite is the Polar Capital Global Healthcare Fund. However, given that it is trading on a premium of around 1 per cent, analysts suggest a switch into Worldwide Healthcare, which has outperformed Polar Capital Global Healthcare by 7 per cent over the past year.
Another option is the International Biotechnology Trust, which is focused on development stage biotechnology companies that are quoted or unquoted with the potential for high growth.
There are also a number of passive plays offering exposure to the sector such as the Legal & General Global Health & Pharmaceutical Index trust, while Deutsche Bank's exchange-traded fund (ETF) platform offers a number of ETFs with exposure to sector such as the db x-trackers MSCI Emerging Markets Healthcare TRN Index ETF and the db x-trackers Stroxx Europe 600 Health Care ETF, with TERs of 0.65 per cent and 0.30 per cent, respectively.
As for the amount of exposure investors should hold to the sector, Ms Patel says that with any specialist fund the trick is not to put all your eggs in one basket, so perhaps 5 per cent, but no more than 10 per cent in such a specialised area.
