Pharma funds category was followed by information technology funds that delivered 2.27 percent average returns during the same period.
Mutual fund schemes investing in pharmaceutical sector emerged as the best performing ones in the one-month period ending July 2.
As per data on mutual fund research firm, Value Research, pharma funds have delivered the highest average return of 4.60 percent during the review period.
In comparison, Nifty Pharma Index went up 12.78 percent in the last one month.
Fund managers believe valuations of pharma companies have become better after prolonged underperformance in the past three years, leaving room for significant potential upside.
Noting the upside potential in pharma, ICICI Prudential Mutual Fund and Mirae Asset Mutual Fund launched pharma and healthcare funds last month.
In the last few years, the pharmaceutical industry was hit both at home and globally. The sector suffered after there was pressure on companies to reduce prices due to increasing competition in India.
Globally, buyer consolidation in the US market and FDA inspections prompting the stoppage of US sales from Indian plants, have hurt performance.
Pharma funds category was followed by information technology funds that delivered 2.27 percent average returns during the same period.
Worst hit
Among other sectoral funds, infrastructure schemes were worst hit delivering negative 7.32 percent returns.
Other categories that gave negative returns were funds investing in fast moving consumer goods sector and banking.