Country’s third largest asset manager, HDFC Mutual Fund, has filed for a defence fund which will be the first such fund in the Rs 37 lakh crore mutual fund industry.
It will be a a sectoral fund that will invest in companies operating in the defence sector. After the fund is approved by the market regulator Securities and Exchange Board of India (SEBI) it will be launched for the public.
It will be benchmarked against the newly-launched Nifty India Defence Index. The current set of stocks in the index include Astra Microwave Products, BEML, Bharat Dynamics, Bharat Electronics, Cochin Shipyard, Garden Reach Shipbuilders & Engineers, Hindustan Aeronautics, MTAR Technologies, Mazagaon Dock Shipbuilders and Solar Industries. The index will consist of companies that are either part of the defence industry or those that obtain at least ten percent of their revenues from defence industry.
A back-tested analysis of the index shows that it has delivered 25 percent returns in last four years.