HDFC Asset Management Co Ltd on Tuesday announced the country’s first mutual fund focus on the defence sector, a move that will allow investors to tap into the space’s growth prospects. HDFC Defense Fund’s New Fund Offer (NFO), an open-ended equity scheme, will open on May 19 and close on June 2, HDFC AMC said in a statement.
The fund will invest at least 80 percent of its net assets in companies in the defense and allied sectors.Stocks in the defense and allied sectors include stocks that form part of aerospace and defense; Explosives, shipbuilding, and allied services.
“In a multi-faceted world, global defence spending is going to increase as countries increase their defence capabilities. Increasing self-sufficiency and manufacturing capacity in defence led by a strong R&D (R&D) focus creates opportunities for Indian companies to serve the domestic market as well as tap into the larger export potential. It can offer a multi-decade investment opportunity,” said Abhishek Poddar – Fund Manager – Equity and Senior Equity Analyst, Dealing and Investing in HDFC AMC.
