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  • Neetika Gupta

HDFC Defence Fund, recently Launched Fund has stopped Lumpsum subscription

HDFC Defence Fund to stop taking lumpsum investments, limit new SIPs upto to Rs 10,000/- only

In an unprecedented move in the history of Indian mutual funds, HDFC Mutual Fund has announced the discontinuation of lumpsum investments in its newly launched Defence Fund. Additionally, the fund house has decided to limit the maximum monthly investments through systematic investment plans (SIPs) to Rs 10,000 for new investors starting from June 12.

HDFC MF has also made the decision to suspend the registration of new systematic transfer plans in the scheme. While similar restrictions have been imposed by other fund houses in the past to ensure the prudent allocation of funds, it is rare for a newly launched fund to take such measures. Notably, restrictions of this nature are currently in place for SBI Smallcap Fund and Mirae Asset Emerging Bluechip Fund; but such restriction had come in after some time after their existence.

The HDFC Defence Fund stands apart from other mutual fund schemes in India as it primarily invests in stocks of the defence and allied sectors, including aerospace and shipbuilding. The new fund offer (NFO) for this unique scheme commenced on May 19, 2023, and concluded on May 30, 2023.

The decision to discontinue lumpsum investments and limit the maximum monthly investments of Rs 10000/- through SIPs can be attributed to the specific characteristics of the defence sector. While the defence industry in India has witnessed substantial growth in recent years, the number of listed companies in this sector remains relatively limited. At the time of the fund's launch, it had a small universe of just 21 stocks, with a majority of them being small-cap stocks.

By implementing these restrictions, HDFC MF aims to ensure the orderly deployment of fresh funds within the scheme's investment strategy and theme. This proactive approach aligns with the fund house's commitment to maintaining a judicious investment approach, safeguarding the interests of both existing and potential investors.

As the first mutual fund scheme in India to take such measures shortly after its launch, HDFC Defence Fund sets a new precedent in the industry. This development highlights the fund house's dedication to effectively manage investor inflows and maintain the integrity of its investment strategy in the face of unique market circumstances.

Investors and market participants eagerly await further updates from HDFC Mutual Fund as they continue to monitor the performance of the Defence Fund and assess the evolving dynamics of the defence and allied sectors in India.

NAV as on 8th June 2023 : Rs 10.03 per unit


Mutual Fund investments are subject to market risks, read all scheme related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of future performance of the schemes. The Mutual Fund is not guaranteeing or assuring any dividend under any of the schemes and the same is subject to the availability and adequacy of distributable surplus. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to specific legal, tax and financial implications of the investment/participation in the scheme.


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