India's first mutual fund exclusively for investment in the defence sector came from HDFC Mutual Fund, named HDFC Defence Fund. It was launched in July 2023. Within 2 years, this fund had given nearly 60 percent returns. But the opportunity for fresh investment in this fund had been closed. Since July 8, 2024, lump-sum investments have been barred. Restrictions were imposed for SIPs as well. That barrier is now set to be removed.
Change in rules:
Financial planner Nilanjan De from Wishlist Capital says that HDFC MF has announced that fresh SIPs can now be restarted in this fund. However, following multiple conditions and rules, SIP of up to ₹5000 per month can be made in this fund. SIP registration will begin on December 23, 2025. Those who already have SIP in this fund will also get this opportunity. That means they can start a fresh SIP of up to ₹5000 in this fund.
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Restrictions remain
Nilanjan De informs that even after starting SIP, fresh lump-sum investments will not be possible. There are various restrictions for the Switch-in of the fund as well. However, there are no restrictions for withdrawing money, Switch Out, or STP-Out.
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Significance of the defence fund
Multiple experts have indicated growth in India's defence sector. Earlier, the defence sector gave good returns. For those who don't want to invest directly in stocks, a mutual fund becomes a good investment option. India has multiple mutual funds for investing only in defence stocks. Except for this one, all others are defence index funds. Only selected stocks are invested in through the HDFC Defence Fund (actively managed defence sector-focused mutual fund). For this reason, a section of market experts believe that if everything remains alright, this fund can give profits again. Though their warning is that mutual fund investment does not remain outside market risks.
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