NFO : Aditya Birla Sun Life Nifty India Defense Index Fund : Aditya Birla Sun Life AMC Limited (ABSL AMC), one of the leading mutual fund companies in the country, launched a new index fund on Friday. The New Fund Offer (NFO) of this new fund named Aditya Birla Sun Life Nifty India Defence Index Fund has opened for subscription on 9 August 2024 and can be subscribed till 23 August 2024. Nifty India Defence Index Fund is an open-ended index fund, which will track the Nifty India Defence Index.
Investment opportunity in defence sector
The NFO of this new equity fund of Aditya Birla Sun Life will provide the common investors of the country an opportunity to invest in India’s rapidly growing defense sector. Due to the efforts of the government, a big change is coming in this sector. The defense budget of Rs 6.22 lakh crore and the estimate of 15% annual increase in capital expenditure till FY24-30 is an example of this. Through this fund, investors can invest in companies that mainly work in sectors like manufacturing, aerospace, shipbuilding and defense electronics. It gives investors a unique opportunity to be a part of the changes taking place in this industry, as the government has invested heavily to increase the country’s military capabilities and reduce dependence on imports.
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The future of this sector is better: Balasubramaniam
Speaking at the launch of the fund, A. Balasubramanian, Managing Director and CEO, Aditya Birla Sun Life AMC Ltd, said, “The government has significantly increased its investments in the defence sector to meet internal requirements, reduce import dependence and meet growing global demand. There is also a focus on strengthening and enhancing the capabilities of the country’s defence system. Entry barriers are very high due to the capital intensive nature of this industry and the constant evolution of products. Also, given the low-cost base, the market expansion potential in this sector is huge. As demand increases, the market share of companies operating in this sector is expected to increase significantly.”
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Better for long term investment
This fund can be especially good for those investors who want to invest for the long term and want to diversify their portfolio. Due to the rapidly increasing orders and government policies in the defense sector, this fund can prove to be beneficial for investors in the long term. Apart from the increase in government expenditure on defense, there is also a possibility of increase in export demand due to favorable procurement policy and international geo-political conditions. In such a situation, this fund can become an attractive option to capitalize on the better future of the defense sector. HDFC Defence FundThe direct plan of HDFC Defence Fund has given a return of 106.10% in the last one year. While the return of Nifty India Defence Total Return Index in the last one year has been 139.45 percent.
(Disclaimer: The purpose of this article is only to provide information, not to give investment advice. Take any investment decision only after consulting your investment advisor.)
