HDFC Defence Fund To Halt Fresh SIPs From July 22

It has been the top-performing scheme in the sectoral/thematic category over the past year with a return of 140% as of July 8.

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HDFC Defence Fund will not receive any request for fresh systematic investment plans from July 22. The SIPs and systematic transactions registered before the date of effect will be continued to process without changes, according to HDFC Mutual Fund.

There will not be any restrictions on redemptions and systematic transfer plans out of the scheme, it said in the notification dated July 8. "Requests for fresh systematic investment plan registrations in the scheme shall not be accepted from the effective date."

HDFC Defence Fund, a sectoral fund with a focus on companies operating in the defence space, had halted fresh lumpsum investments, including switch-ins and systematic transfer registrations, within a week of launch. At the time, fresh monthly SIPs, including top-up SIPs, were restricted to Rs 10,000 per investor.

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Launched in June last year, the scheme received significant retail interest, given the attention paid to defence by the Modi government. A higher defence budget and a focus on indigenisation led to a steep increase in the prices of stocks in the sector.

As a result, the scheme has been the top performing in the sectoral/thematic category over the past year with a return of 140% as on July 8.

As per the latest available information, HDFC Defence Fund comprises 21 stocks. As much as 62.5% of assets under management were in the top five stocks. In fact, Hindustan Aeronautics Ltd. and Bharat Electronics Ltd. account for a lion's share, at 22% and 21.7% of the AUM respectively.

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