Motilal Oswal Asset Management Company (MOAMC) has launched the Motilal Oswal Nifty India Defence Index Fund, India's first index fund focused on defence stocks.
This open-ended fund will track the Nifty India Defence Index.
The New Fund Offer (NFO) will be available from June 13 to June 24, 2024.
The Nifty India Defence Index includes 15 companies involved in manufacturing and servicing defence projects, reflecting their market performance.
Over the past year, the index has achieved a compound annual growth rate (CAGR) of 177%, and 89.5% over three years as of May 31, 2024.
However, while the sector shows strong potential, it also has higher volatility.
Research by Nomura highlights a significant opportunity in India's defence sector, estimating a $138 billion pipeline between FY24 and FY32.
India's focus on national security, technological advancement, and government policies prioritising defence positions the sector for substantial growth.
The government's embargo on over 4,600 defence items by December 2027 aims to boost domestic manufacturing under the 'Atmanirbhar Bharat' initiative and increase defence exports, expected to double in the next 3-4 years.
Experts note that companies in this sector have improved their balance sheets and profitability due to increased exports and government defence spending, making the Motilal Oswal Nifty India Defence Index Fund an attractive investment.
Prateek Agrawal, MD & CEO of MOAMC, stated, "India's focus on self-reliance in defence is driving significant growth and innovation. The Motilal Oswal Nifty India Defence Index Fund is set to capitalise on the projected $100-120 billion expansion in the defence sector over the next six years. As the fourth-largest defence spender globally, India's modernisation efforts offer substantial opportunities for domestic companies."
Pratik Oswal, Chief of Business Passive Funds, Motilal Oswal Asset Management Company added, "Since the Covid era, the Nifty India Defence TRI Index has outperformed the Nifty 50 TRI four times in the last six years. This reflects the government's strategic policies to boost exports and reduce imports. The 'Made in India' initiatives have led to a 74% increase in FDI flows, driving the sector's expansion. Investors seeking long-term growth can consider the Motilal Oswal Nifty India Defence Index Fund, which tracks the Nifty India Defence Total Return Index."
The fund aims to provide returns that mirror the performance of the Nifty India Defence Total Return Index, subject to tracking error, though there is no guarantee of achieving the investment objective.
This open-ended fund will track the Nifty India Defence Index.
The New Fund Offer (NFO) will be available from June 13 to June 24, 2024.
The Nifty India Defence Index includes 15 companies involved in manufacturing and servicing defence projects, reflecting their market performance.
Over the past year, the index has achieved a compound annual growth rate (CAGR) of 177%, and 89.5% over three years as of May 31, 2024.
However, while the sector shows strong potential, it also has higher volatility.
Research by Nomura highlights a significant opportunity in India's defence sector, estimating a $138 billion pipeline between FY24 and FY32.
India's focus on national security, technological advancement, and government policies prioritising defence positions the sector for substantial growth.
The government's embargo on over 4,600 defence items by December 2027 aims to boost domestic manufacturing under the 'Atmanirbhar Bharat' initiative and increase defence exports, expected to double in the next 3-4 years.
Experts note that companies in this sector have improved their balance sheets and profitability due to increased exports and government defence spending, making the Motilal Oswal Nifty India Defence Index Fund an attractive investment.
Prateek Agrawal, MD & CEO of MOAMC, stated, "India's focus on self-reliance in defence is driving significant growth and innovation. The Motilal Oswal Nifty India Defence Index Fund is set to capitalise on the projected $100-120 billion expansion in the defence sector over the next six years. As the fourth-largest defence spender globally, India's modernisation efforts offer substantial opportunities for domestic companies."
Pratik Oswal, Chief of Business Passive Funds, Motilal Oswal Asset Management Company added, "Since the Covid era, the Nifty India Defence TRI Index has outperformed the Nifty 50 TRI four times in the last six years. This reflects the government's strategic policies to boost exports and reduce imports. The 'Made in India' initiatives have led to a 74% increase in FDI flows, driving the sector's expansion. Investors seeking long-term growth can consider the Motilal Oswal Nifty India Defence Index Fund, which tracks the Nifty India Defence Total Return Index."
The fund aims to provide returns that mirror the performance of the Nifty India Defence Total Return Index, subject to tracking error, though there is no guarantee of achieving the investment objective.
First Published: Jun 12, 2024 3:55 PM IST
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