HDFC Mutual Fund said that the closing date of the New Fund Offering (NFO) of its first defence sector fund in India, the HDFC Defence Fund (HDF) has been shifted to an earlier date from June 2 to May 30, SMC Global Securities Ltd. said in its weekly update.
The NFO was launched on May 19. Via the NFO, HDFC aims to invest a minimum of 80 percent of the corpus in shares of defence and allied sector companies.
HDFC Defence Fund is an open-ended equity scheme investing in Defence & allied sector companies. The scheme will invest at least 80% of its Net Assets in Defence & allied sector Companies. Defence & allied sector stocks include: (i) stocks forming part of certain eligible ‘basic industries’ based on AMFI industry classification including aerospace and defence, explosives, shipbuilding and allied services, as amended from time to time; or (ii) Stocks from any other defence and allied sectors as per the benchmark’s criteria; or (iii) stocks present on SIDM (Society of Indian Defence Manufacturers) list; and which obtain at least 10 percent of revenue from the defence segment.
The scheme is being managed by Abhishek Poddar and the performance of the scheme will be benchmarked against Nifty India Defence Index TRI. Further, the investment strategy of the fund focuses on “growth and quality at reasonable valuations” and the fund manager will invest in companies of all sizes. As on April 28, 2023, the benchmark had 13 constituents. Hindustan Aeronautics and Bharat Electronics each had almost 20 percent allocation. Solar Industries, the third largest stock, has 18 percent weight. The universe for HDF comprises 21 stocks and 80 percent of the scheme money will have to be invested in some of these stocks.
The Fund’s focus would be on growth and quality at reasonable valuations by investing across large, mid, and small-cap stocks.
HDFC MF advised investors to consult their financial advice, if in doubt about whether the defence fund is suitable for them.
