HDFC Asset Management puts restrictions on lumpsum and systematic transactions for HDFC defence fund

HDFC Asset Management said that referring to the addendum dated June 6, 2023, on discontinuation of lumpsum subscriptions and restrictions on Systematic Transactions in HDFC Defence Fund. Regarding the same, the following has been decided in the Scheme with effect from July 22, 2024, i.e. the effective date:

1. New SIP Registrations: Requests for new Systematic Investment Plan (SIP) registrations in the HDFC Defence Fund will not be accepted from July 22, 2024.
2. Lumpsum Investments and Switch-ins: Fresh lumpsum investments, including switch-ins, and new systematic transfer registrations into the HDFC Defence Fund will remain restricted.
3. Existing SIPs: SIPs registered before July 22, 2024, will continue to be processed without any changes.
4. Ongoing Systematic Transactions: All systematic transactions already registered will continue to be processed as usual.

There will be no restrictions on redemptions, switch-outs, or Systematic Transfer Plan (STP) outs from the HDFC Defence Fund.

All other terms and conditions outlined in the Scheme Information Document (SID) and Key Information Memorandum (KIM) of the HDFC Defence Fund remain unchanged.

This addendum, dated July 8, 2024, is now an integral part of the Scheme Information Document and Key Information Memorandum for the HDFC Defence Fund.

HDFC Mutual Fund, which successfully raised ₹1,000 crores through a new fund offer (NFO) targeting defence-related investments, has ceased accepting lumpsum investments in the HDFC Defence Fund since June 12, 2023.

The HDFC Defence Fund stands out as the sole actively managed mutual fund in India focused on the defence sector. The fund seeks to leverage opportunities in this area, which has garnered significant interest from investors. With the Indian government prioritising the modernisation of its defence forces and promoting self-reliance, the sector is poised for long-term growth.

Additionally, increased global geopolitical tensions have led many countries to enhance their defence capabilities, further supporting this trend.

HDFC Defence Fund is an equity thematic fund that started on June 5, 2023. It is benchmarked against the NIFTY 50 TRI and has a total expense ratio (TER) of 1.95% as of May 31, 2024. The fund is open-ended, meaning it allows for ongoing investments and redemptions. The minimum investment and top-up amounts are both ₹100.

As of May 31, 2024, the fund's total assets amount to ₹3,232.88 crore. There is an exit load of 1% if the investment is redeemed within one year.