HDFC MF unveils new defense fund, subscription to open on May 19; 10 key points

Navneet Munot, Managing Director and Chief Executive Officer, HDFC Asset Management Company Limited, at the launch said, “Defence preparedness is important for peace, prosperity and societal well-being. The government is emphasizing on self-reliance in the defense sector as well.”

“With HDFC Defense Fund, the first of its kind fund to invest in companies in the defense and allied industries, we are providing investors with an opportunity to participate in the structural growth potential of India’s defense sector,” said Munot.

Meanwhile, Abhishek Poddar – Fund Manager said, “In a multipolar world, defense expenditure globally is set to increase as countries ramp up their defense capabilities. Self-reliance in defense led by strong R&D focus and increased manufacturing capabilities.” Creates opportunities for Indian companies. Serves the domestic market as well as taps the huge export potential. It can provide a multi-decade investment opportunity.”

Here are 10 key highlights of HDFC Defense Fund:

1. The NFO for this scheme will start from 19th May and will be available till 2nd June. The product labeling specified during the New Fund Offer period is based on internal assessment of the scheme characteristics or model portfolio and may differ post NFO when the actual investment is made.

2. HDFC MF says the Defense Fund is suitable for investors looking for long-term capital growth/income.

3. HDFC Defense Fund is an open-ended equity scheme investing in defense and allied sector companies. The scheme will invest at least 80% of its total assets in defense and allied sector companies.

4. Defense and allied stocks are those stocks forming part of certain eligible ‘core industries’ based on the AMFI industry classification including aerospace and defence, explosives, shipbuilding and allied services, as amended from time to time.

5. Also, any other defense and allied sectors stocks are present in SIDM (Society of Indian Defense Manufacturers) list as per benchmark norms; And finally, those stocks which derive at least 10% of their revenue from the defense segment— have also been included in the new fund scheme.

6. The scheme will be managed by Abhishek Poddar – Fund Manager – Equity and Senior Equity Analyst, Dealing & Investments, HDFC Asset Management Company Limited, who has over 17 years of experience in Equity Research, Investment Banking and Corporate Finance.

7. HDFC Defense Fund seeks to invest in good quality managed companies with a performance track record and achieve diversification by following a multi-cap strategy.

8. The fund’s focus will be on growth and quality at reasonable valuations by investing in large, mid and small cap stocks.

9. HDFC MF advises investors to seek their own financial advice if in doubt as to whether a defense fund is suitable for them.

10. HDFC AMC is the investment manager of HDFC Mutual Fund (HDFC MF).