HDFC Defense Fund: Strong growth is being seen in the defense stocks listed in the Indian stock market. So there is a race among investors to invest in defense stocks and mutual funds related to defense sector. HDFC Mutual Fund, after stopping lump sum investment in HDFC Defense Fund in view of valuation concerns, is now going to impose restrictions on investment through Systematic Investment Plan also. There will be no registration of new SIPs in HDFC Defense Fund from 22 July 2024.
Asset management company HDFC Mutual Fund will not register new SIP in HDFC Defense Fund from July 22, 2024. The SIP which is registered before July 22 will be processed. There was a ban on taking lump sum investment in the fund even before June 2023. HDFC Defense Fund is a sectoral fund that invests in stocks of defense companies or related sectors. This fund has been benchmarked under Nifty India Defense Index TRI. Abhishek Poddar and Dhruv Muchhal manage this fund.
HDFC Mutual Fund is facing problems in deployment of funds due to valuation concerns in defense sector stocks. But there will be no restriction on redemption of investments, switch-outs, STP-outs. This is not the first time that asset management companies have taken this decision. Even before this, asset management companies have imposed restrictions on taking lump sum investment in small cap funds and also on taking investment through SIP.
HDFC Defense Fund was launched on 2 June 2023. Since then HDFC Defense Fund has given a return of 123.33 percent to investors. Whereas the fund has given a return of 132.73 percent in one year. The NAV of the fund on July 10, 2024 was Rs 24.88 per unit.
HDFC Defense Fund manages a total fund of Rs 3667 crore and there are 21 stocks in the fund’s portfolio in which more than half of the assets under management are invested in three defense companies Hindustan Aeronautics, Bharat Electronics and Astra Microwave Products. The remaining 50 percent AUM is invested in 18 stocks. The rise in defense stocks can be gauged from this; HAL’s stock has jumped by 183 percent in a year, while Mazagon Dock’s stock has jumped by 260 percent.
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