HDFC Defence Mutual Fund: Building Strong Financial Foundations for Your Future
Building a strong financial foundation is crucial for securing a stable future. One investment avenue that can assist in achieving this goal is HDFC Defence Mutual Fund. In this article, we will explore the features and benefits of this mutual fund, understanding its investment approach, performance track record, and how it can contribute to your financial well-being.
Understanding HDFC Defence Mutual Fund
The HDFC Defence Mutual Fund NFO presents a unique opportunity for investors to participate in a secure and growth-oriented investment avenue. Starting from May 19, 2023, and closing on May 30, 2023, this New Fund Offer (NFO) introduces a mutual fund.
Benefits of Investing in HDFC Defence Mutual Fund
Diversification is a key advantage offered by HDFC Defence Mutual Fund. It spreads investments across different asset classes, such as equity, debt, and cash equivalents, thereby reducing risks associated with any single investment. Additionally, the fund is managed by experienced professionals from Mr. Abhishek Poddar, who 17 years of experience of which 13 years are in equity research, 1 year in investment banking and 3 years in corporate finance/risk audit and possess the knowledge and skills to optimize returns and navigate market fluctuations. The fund also provides flexibility and liquidity, allowing investors to enter and exit with ease.
Investment Strategy and Portfolio Allocation
HDFC Defence Mutual Fund follows a disciplined investment strategy and adopts a prudent approach to asset allocation. The fund’s portfolio includes investments in various sectors and securities, carefully selected based on thorough research and analysis. The scheme will invest predominantly in equity and equity related securities of Defence & allied sector companie. It may also incorporate unique investment themes or strategies to capitalize on emerging opportunities and generate consistent returns.
|Types of Instruments||MinimumAllocation|
(% of Net Assets)
(% of Net Assets)
|Equity and Equity related instruments of Defence & allied sector Companies||80||100||High to Very High|
|Equity and Equity related instruments of|
companies other than above
|0||20||High to Very High|
|Units of REITs and InvITs||0||10||Medium to High|
|Debt securities, money market instruments|
and Fixed Income Derivatives
|0||20||Low to Medium|
|Units of Mutual Fund||0||20||Low to High|
1) Bottom-up approach of portfolio construction with deep understanding of the defence ecosystem
2) Core of portfolio (>80%) will be listed companies that obtain at least 10% of revenues from defence segment within:
- Stocks in AMFI Industry classification of Aerospace &Defence, Explosives, Ship Building & Allied Service
- Stocks present on SIDM (Society of Indian Defence Manufacturers) list
- Stocks from any other defence & allied sectors as per benchmark’s criteria (Nifty India Defence Index)
3) Focus on growth and quality at reasonable valuations.
4) Investment across large, mid and small caps
5) Benchmark—Nifty India Defence Index TRI
(Total Returns Index
#Defence & allied sector stocks include
(i) Stocks forming part of certain eligible ‘basic industries’ based on AMFI Industry classification including Aerospace & Defence, Explosives,
Ship Building & Allied Services as amended from time to time; or
(ii) Stocks from any other defence & allied sectors as per benchmark’s criteria; or
(iii) Stocks present on SIDM (Society of Indian Defence Manufacturers) list;
and which obtain at least 10% of revenue from the defence segment as mentioned above
Suitability and Risk Factors
It’s important to evaluate the suitability of HDFC Defence Mutual Fund based on individual investment objectives and risk tolerance. While the fund aims to mitigate risks through diversification and professional management, it’s crucial to be aware of potential risks associated with market volatility, economic factors, and changes in the investment landscape.
- HDFC Defence Fund (An open ended equity scheme investing in Defence & allied
sector companies) is suitable for investors who are seeking*
- To generate long-term capital appreciation / income
- Investment predominantly in equity & equity related instruments of defence
and allied sector companies
- *Investors should consult their financial advisers, if in doubt about whether
the product is suitable for them
source: HDFC Fund (hdfcfund.com)
HDFC Defence Mutual Fund Facts
|Investment Objective||To provide long-term capital appreciation by investing predominantly in equity & equity related instruments of defence
and allied sector companies
|Fund Manager||Mr. Abhishek Poddar|
|Benchmark Index||Nifty India Defence Index TRI (Total Returns Index)|
|Plans Regular and Direct||Regular and Direct|
|Options||Regular and Direct Plans offer the following sub-options:
• Growth Option
•Income Distribution cum Capital Withdrawal (IDCW) Optio
Payout of IDCW Option / facility and
Re-investment of IDCW Option / facilit
|During NFO Period:
Purchase: ₹ 100/- and any amount thereafter
During continuous offer period (after scheme re-opens for repurchase and sale):
Purchase and additional purchase: ₹ 100/- and any amount thereafter
Note: Allotment of units will be done after deduction of applicable stamp duty and transaction charges, if any.
|Exit Load||In respect of each purchase/switch-in of units, an Exit load of 1% is payable if units are redeemed/switched-out within 1 year from the
date of allotment.
No Exit Load is payable if units are redeemed / switched-out after 1 year from the date of allotment.
No Entry / Exit Load shall be levied on bonus units and Units allotted on Re-investment of Income Distribution cum Capital Withdrawal.
In respect of Systematic Transactions such as SIP, Flex SIP, STP, Flex STP, Swing STP, Exit Load, if any, prevailing on the date of registration /
enrolment shall be levied
Why invest in HDFC Defence Fund?
- Multipolarity to aid increase in global defence expenditure over long term
- India’s strong economic growth and geopolitical considerations support long runway for growth in defence expenditure.
- India is focused on self reliance – increasing opportunity available for Indian defence players
- R&D focus and manufacturing to help tap global export potential
- Indian defence companies display strong orderbook and growth potential, with healthy balance sheet.
How to Invest in HDFC Defence Mutual Fund
Investing in HDFC Defence Mutual Fund is a straightforward process that can be done through the following steps:
1. Research and Evaluation: Before investing, it is essential to conduct thorough research and evaluation of HDFC Defence Mutual Fund. Review the fund’s investment objectives, strategy, historical performance, risk factors, and other relevant information available in the fund’s offer document.
2. KYC Compliance: Ensure that you are KYC (Know Your Customer) compliant as per regulations set by the Securities and Exchange Board of India (SEBI). If you are not KYC compliant, complete the necessary KYC documentation through a registered intermediary such as a mutual fund distributor, bank, or KYC registration agency.
3. Select the Mode of Investment: HDFC Defence Mutual Fund offers multiple modes of investment to cater to different investor preferences. You can choose between investing online through the fund’s official website, investing through a registered mutual fund distributor, or visiting the nearest HDFC Mutual Fund branch.
4. Complete the Application Form: Obtain the application form for HDFC Defence Mutual Fund either online or from the authorized distributor or branch. Fill in the necessary details accurately, including personal information, investment amount, and investment mode (lump sum or systematic investment plan).
5. Submit the Application and Payment: Once the application form is completed, submit it along with the investment amount to the designated collection centers. If investing online, follow the instructions provided on the website for making payment and submitting the application.
6. Acknowledgment and Confirmation: Upon successful submission of the application and payment, you will receive an acknowledgment receipt or confirmation. This may include an allotment advice, account statement, or any other document that serves as proof of your investment in HDFC Defence Mutual Fund.
7. Portfolio Monitoring and Review: After investing in HDFC Defence Mutual Fund, regularly monitor your portfolio performance and review the fund’s progress. Stay updated with periodic reports, statements, and notifications provided by the fund to assess the performance and make any necessary adjustments to your investment strategy.
Remember, it is advisable to consult with a financial advisor or investment professional to understand your risk tolerance, investment goals, and suitability before investing in HDFC Defence Mutual Fund or any other mutual fund. Their guidance can help you make well-informed investment decisions aligned with your financial objectives.
Building a strong financial foundation requires careful consideration and strategic investment choices. HDFC Defence Mutual Fund offers a reliable avenue for investors to create wealth and manage risks effectively. By diversifying investments, accessing professional management expertise, and capitalizing on tax advantages, individuals can enhance their financial well-being. However, it is advisable to consult with financial advisors to align investments with personal goals and objectives.
The information provided in this article is for informational purposes only and should not be considered as financial advice. Investors are encouraged to conduct their own research and consult with financial professionals before making any investment decisions.