Motilal Oswal Nifty India Defence Fund:First index fund in India to provide exposure to Indian-listed military industries, Motilal Oswal Asset Management Company (MOAMC) recently unveiled the Motilal Oswal Nifty India Defence Index Fund. The fund aims to provide chances for investors to participate in the expanding possibilities of the defense sector.
Motilal Oswal An open-ended fund called the Nifty India Defence Index Fund replicates and tracks the overall performance of the Nifty India Defence Index. June 13, 2024, is when the NFO starts, and June 24, 2024, is when it closes.
The Nifty India Defence Index aims to monitor the success of defence companies that generate and assist military initiatives. It consists of a total of 15 companies in the market.
Business today claims that the CAGR for the Nifty India Defence Index was 177% for the past year and 89.5% for the past three years as of May 31, 2024. Defense has a lot of performance potential, but it might also be more volatile.
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Why Defence?
Nomura’s study estimates that the defense sector in India has a USD 138 billion pipeline between FY24 and FY32F, indicating a considerable opportunity.
Investors have a rare opportunity to be part of this strategic expansion as India keeps emphasizing national security and technology development. The recent performance of the defense sector has been really good, which can be connected to many policy changes and the government’s’s increasing focus on it.
As per Financial Express, the Indian government has imposed an import embargo on over 4,600 defense items by December 2027 to decrease imports and boost domestic defense production in the country’s pursuit of “Atmanirbhar Bharat” (self-reliance). The government is also making a concerted effort to boost exports of defence-related goods and services, which Nomura Research predicts will quadruple over the next three to four years.
Experts in the market claim that because of the government’s increased spending on defense and ongoing growth in exports, businesses in this industry have seen improvements to both their balance sheets and profitability. Because of this, investing in the India Defence Index Fund is a desirable financial option.
The MD and CEO of Motilal Oswal Asset Management Company Ltd., Prateek Agrawal, stated: “India’s defense sector’s Atmanirbharta (Self-Reliance) advancements are opening up enormous opportunities for growth and innovation.” We want to take advantage of the estimated $100 billion to $120 billion expansion in the defense sector over the next six years with the Motilal Oswal Nifty India Defence Index Fund
India, which spends the fourth most on defense in the world, offers a lot of opportunities for its defense businesses, with a focus on modernization and independence. This fund should gain from India’s big steps forward in infrastructure and defense technology.
“Since the Covid era, the Nifty India Defence TRI Index has outperformed the Nifty 50 TRI four times in the last six calendar years,” said Pratik Oswal, Chief of Business Passive Funds at Motilal Oswal Asset Management Company Ltd.
This is the result of the government’s unrelenting focus on strengthening bilateral ties between countries as a means of implementing strategic policy changes that will increase exports and decrease imports. India is becoming increasingly proficient in the manufacturing industry as a result. The defense sector is expanding as a result of the remarkable 74% rise in FDI flows brought about by Made in India programs.
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The Motilal Oswal Nifty India Defence Index Fund is an open-ended fund that replicates and tracks the Nifty India Defence Total Return Index, subject to tracking error, for investors looking for long-term capital growth with returns commensurate with the performance of the index. We anticipate that the defense budget will receive more funding in 2024 as well,” he continued.
