Huan Qiu Wang·2025-08-03 01:44Core Viewpoint - The innovative drug sector has emerged as a hot investment theme in the capital market this year, driven by a combination of policy, technology, and capital dynamics, leading to a significant recovery in the overall valuation of the pharmaceutical industry and making pharmaceutical-themed funds a major attraction for investors [1][3]. Group 1: Market Performance - Since the beginning of the year, the innovative drug sector has outperformed the market, with stocks like Heng Rui Medicine and BeiGene reaching new highs, contributing to a more than 25% increase in the pharmaceutical and biotechnology index [3]. - In July, the index saw a monthly increase of over 12%, fueled by a wave of mergers among global pharmaceutical giants and successful overseas licensing of domestic innovative drugs [3]. - Over 80% of the more than 200 pharmaceutical-themed funds achieved positive returns year-to-date, with the top-performing fund, Yongying Pharmaceutical Health A, leading with a 34.2% monthly increase [3][4]. Group 2: Investor Sentiment and Fund Flows - The recovery of pharmaceutical funds is notable, with nine out of the top ten actively managed equity funds focusing on the pharmaceutical sector, contrasting sharply with last year's lack of interest [4]. - Recent surveys indicate that investor interest in pharmaceutical funds has reached its highest level since 2021, with over 40% of newly launched funds focusing on healthcare themes [4]. - Northbound capital saw a net purchase of over 8 billion yuan in the pharmaceutical and biotechnology sector in July, leading all sectors [4]. Group 3: Long-term Outlook - The pharmaceutical industry is still valued below its historical median, but the innovation cycle is irreversible, with domestic companies transitioning from "following innovation" to "source innovation" [4]. - The next 3-5 years are expected to see the emergence of globally competitive companies in the pharmaceutical sector, creating excess returns for investors [4][5]. - Analysts suggest that despite increased short-term trading activity, the strategic value of the pharmaceutical sector remains unchanged, recommending investors focus on the innovative drug supply chain, high-end medical devices, and consumer healthcare sectors [5].