SIP is going to be closed in this fund of HDFC, new investors will not get a chance from July 22

HDFC Defence Fund: If you want to start investing in theme-related SIPs to take advantage of the rise in defense sector stocks, then hurry up. The reason for this is that after about two weeks, i.e. from July 22, one option is going to be reduced. HDFC Mutual Fund made a related announcement on July 9 that now from July 22, new SIPs (Systematic Investment Plan) will not be possible in its defense fund. According to the announcement of the mutual fund, the SIPs that would have been done before July 22 will continue, that is, investment and withdrawal will continue in it. Another thing is that lump sum and STP (Systematic Transfer Plan) will still remain closed in it.

HDFC Defense Fund is highly concentrated

HDFC Defence Fund is considered a highly concentrated fund as it has 21 stocks out of which only five stocks have a 63 percent weightage. By nature, this fund is a mid and small cap oriented fund. 80 percent of the money of this fund is invested in defense and related companies. The stocks related to defense and related sectors include stocks of aerospace and defense, explosives, shipbuilding and related services.

When this fund was launched, Abhishek Poddar, equity fund manager at HDFC AMC, said that many countries of the world are increasing their defense capabilities. Self-reliance in the defense sector is creating opportunities for Indian companies based on strong R&D focus and increased manufacturing capacity. This has also created a big opportunity for investors. This scheme is managed by Abhishek Poddar and its benchmark is Nifty India Defense Index TRI.

Then why is SIP being discontinued?

HDFC Defense Fund was launched on June 2, 2023 and one can start SIP in it with a minimum investment of Rs 100. According to the details available on the HDFC fund site, in 6 months it has converted an investment of Rs 10,000 into a capital of Rs 16,066.47. Its AUM is Rs 3,665.95 crore. Despite this tremendous response, the decision to close it has been taken because according to experts, there is less liquidity in it and there are also fewer options for investment.