Should you Invest in
Motilal Oswal Nifty India Defence Index Fund
NFO : Open Date: It is open now
NFO : End Date: 24th June
2024
Motilal Oswal Nifty India
Motilal Oswal Nifty India Defence Index Fund
NFO will close on 24 June 2024
In the recent past the shares of the aerospace & defense
companies has witnessed very bullish rally in the markets.
PM Modi-led government at the Centre is focused on
self-reliance (Atmanirbhar Bharat) in defence which is driving the sector`s
meteoric rise. Initiatives like import curbs on defence equipment and a push
for exports are creating opportunities for domestic companies. This is further
supported by increasing foreign direct investments (FDI) in the sector.
Defence Minister Sri Rajnath Singh also said that the government has a target to export over Rs
50,000 crore worth of defence equipment by 2028-2029. The fiscal year 2023–2024
saw a record-breaking Rs 21,083 crore in defense exports..
Hindustan Aeronautics Ltd, NSE: HAL, share
price advanced 1.73 per cent in Friday's trading session to settled at Rs 5,188
per share on the National Stock Exchange (NSE). Bharat Electronics share price
jumped to Rs 309.70 a piece, up by 2.92 per cent on Friday. Mazagon Dock was up
by a whopping 14.02 per cent to end the session at Rs 3,865 apiece. A similar
rally was witnessed in the shares of other aerospace & defence companies,
including Solar Industries, Bharat Dynamics, Cochin Shipyard, BEML Ltd among
others in the index.
Motilal Oswal Nifty India
Defence can be a lucrative category to invest.
The fund gives investors an opportunity to profit from the
anticipated expansion of the Indian defense industry, which is expected to
reach $100–120 billion in the next six years. The fund is designed to track 15
of the top defense manufacturing and services businesses from the Nifty India
Defence Index. As of May 31, 2024, the index had produced impressive returns,
with a 1-year 177.67 % and 5-year CAGR of 55.52%
Top
Companies forming part of Defense Sector
|
Astra Microwave Products Ltd. |
|
Bharat
Dynamics Ltd. |
|
Bharat
Electronics Ltd. |
|
Cochin
Shipyard Ltd. |
|
DCX
Systems Ltd. |
|
Data
Patterns ( |
|
Garden
Reach Shipbuilders & Engineers Ltd. |
|
Hindustan
Aeronautics Ltd. |
|
Ideaforge
Technology Ltd. |
|
MTAR
Technologies Ltd. |
|
Mazagoan
Dock Shipbuilders Ltd. |
|
Mishra
Dhatu Nigam Ltd. |
|
Paras
Defence and Space Technologies Ltd. |
|
Solar
Industries India Ltd. |
|
Zen
Technologies Ltd. |
PROS &
CONS of Investing in Defence Sector
Pros
Diversification within a
sector: Investing in a mutual fund tracking the Nifty defence Index
allows investors to gain exposure to a variety of companies within the defence
sector. This can help spread out risk while still focusing on a specific
industry.
Stable investment in a niche
market: The defence sector is often considered stable due to consistent
government spending and long-term contracts. This can make mutual funds
tracking the defence index a less volatile investment compared to other
sectors.
Potential for growth: With increasing global
tensions and a focus on national security, the defence sector may see growth.
Investing in a mutual fund tracking the Nifty defence Index could capitalise on
this potential.
Passive management: Index funds are
typically passively managed, which means lower management fees for investors.
This cost-saving can be particularly beneficial over the long term.
Cons
Sector-specific risks: While diversification
within the defence sector is possible, investors are still exposed to risks
specific to this industry, such as changes in government policy or defence
spending.
INVESTORS SHOULD UNDERSTAND THAT
THERE ARE NOT MUCH COMPANIES IN THIS SECTOR HENCE INVESTMENT IS LIMITED TO IN
FEW STOCKS ONLY
Only Fund to track record of
past performance is HDFC DEFENCE FUND
which was launched in June 2023 . Rupees 1 Lakh invested in this fund in
June 2023 is worth 2,20,000 today means more than double in one year.
Hence it is
expected that this fund will give
similar return in coming years
प्रस्तुतकर्ता Ajit @ 12:41 am
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