There will be a chance to earn profits from companies in the defense sector, HDFC Mutual Fund will launch the country’s first Defense Fund

HDFC Mutual Fund’s Defense Fund will be the first of its kind in the mutual fund industry. It is an open-ended equity scheme, which will invest in companies in the defense and allied sectors.

Updated On – 9:47 am, Wed, 23 March 22

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HDFC Mutual Fund, the country’s third largest asset manager, has applied to launch the country’s first Defense Fund. HDFC Mutual Fund’s Defense Fund will be the first of its kind in the mutual fund industry. HDFC Mutual Fund has filed Scheme Information Document (SID) for HDFC Defense Fund with SEBI. It is an open-ended equity scheme, which will invest in companies in the defense and allied sectors. HDFC Defense Fund will be a sectoral fund. After getting approval from SEBI, HDFC Mutual Fund will be able to launch this defense fund.

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The emphasis of the government is on making in India and self-reliant in the defense sector.  Domestic defense companies are going to get a big advantage of this.  Now the mutual fund industry is introducing new funds to capitalize on the defense sector.  In this, there will be investment only in companies related to the defense sector.  Allied sectors include Aerospace, Explosives, Shipbuilding, Industries/Stocks in the SIDM (Society of Indian Defense Manufacturers) list or other similar industries/stocks related to Defense Sector.

The emphasis of the government is on making in India and self-reliant in the defense sector. Domestic defense companies are going to get a big advantage of this. Now the mutual fund industry is introducing new funds to capitalize on the defense sector. In this, there will be investment only in companies related to the defense sector. Allied sectors include Aerospace, Explosives, Shipbuilding, Industries/Stocks in the SIDM (Society of Indian Defense Manufacturers) list or other similar industries/stocks related to Defense Sector.

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The scheme will invest in companies with market cap and will use a bottom-up approach to identify companies.  In addition, the scheme can also invest up to 20 per cent of the assets in companies other than defense and allied sector companies to achieve diversification.  The fund will be benchmarked with the recently introduced Nifty India Defense Index TRI (Total Return Index).

The scheme will invest in companies with market cap and will use a bottom-up approach to identify companies. In addition, the scheme can also invest up to 20 per cent of the assets in companies other than defense and allied sector companies to achieve diversification. The fund will be benchmarked with the recently introduced Nifty India Defense Index TRI (Total Return Index).

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The index on the basis of weightage includes Solar Industries India, Bharat Electronics, Hindustan Aeronautics, BEML, MTAR Technologies, Astra Microwave Products, There are Bharat Dynamics, Cochin Shipyard, Mazagoan Dock Shipbuilders and Garden Reach Shipbuilders & Engineers.  The share of industrial manufacturing and chemical sectors in the portfolio will be 79 per cent and 21 per cent, respectively.

The index on the basis of weightage includes Solar Industries India, Bharat Electronics, Hindustan Aeronautics, BEML, MTAR Technologies, Astra Microwave Products, There are Bharat Dynamics, Cochin Shipyard, Mazagoan Dock Shipbuilders and Garden Reach Shipbuilders & Engineers. The share of industrial manufacturing and chemical sectors in the portfolio will be 79 per cent and 21 per cent, respectively.

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The fund will be primarily managed by Abhishek Poddar.  A minimum investment of Rs 5,000 has to be made during the New Fund Offer (NFO) period as well as the regular offer period.  Please note that since this scheme is a sectoral fund, the concentration of investment is likely to be high.  The Nifty India Defense Index has given a return of 25 per cent in four years.  The scheme's portfolio will include companies that are not only constituents of the benchmark index but also other companies that are classified or covered under the defense sector.

The fund will be primarily managed by Abhishek Poddar. A minimum investment of Rs 5,000 has to be made during the New Fund Offer (NFO) period as well as the regular offer period. Please note that since this scheme is a sectoral fund, the concentration of investment is likely to be high. The Nifty India Defense Index has given a return of 25 per cent in four years. The scheme’s portfolio will include companies that are not only constituents of the benchmark index but also other companies that are classified or covered under the defense sector.


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