HDFC Asset Management Company establishes India’s first ever defence fund

On Tuesday, HDFC Asset Management Company Ltd. unveiled the nation’s first mutual fund with a defence industry focus. Investors will have the chance to benefit from the defence industry’s growth potential with the establishment of the HDFC Defence Fund.

In a statement, HDFC AMC said that the HDFC Defence Fund’s new fund offering (NFO), an open-ended equity plan, would begin on May 19 and expire on June 2. At least 80% of the fund’s net assets will be allocated to investments in businesses in the defence and related industries. Aerospace and defence stocks, as well as those related to explosives, shipbuilding, and allied services, are included in the sector of defence and allied stocks.

“In a multipolar world, defence expenditure globally is set to increase as countries enhance their defence capabilities. Self-reliance in defence led by strong R&D (Research and Development) focus and enhancement of manufacturing capabilities creates an opportunity for Indian companies to serve the domestic market as well as tap the large export potential. This could offer a multi-decadal investment opportunity,” averred Abhishek Poddar, Fund Manager – Equity and Senior Equity Analyst, Dealing and Investments at HDFC AMC.

The asset management company added that the plan will invest in businesses with top-notch management and a proven track record, and that it will employ a multi-cap strategy to achieve diversity. The fund would invest in large, mid, and small-cap stocks with an emphasis on development and quality at fair prices.