HDFC mutual fund to launch country’s first defence fund --All you need to know

New Delhi: HDFC Mutual Fund has filed a scheme information document (SID) with SEBI to come up with India’s first Defence Fund. Called the HDFC Defence Fund, it will be an open-ended equity scheme that will be investing in defence & allied sector companies.

In its draft paper, HDFC said that the Investment Objective will be to provide long-term capital appreciation by investing predominantly in equity and equity related securities of Defence & allied sector companies. Allied sectors include Aerospace, Explosives, Ship Building, industries /stocks present on SIDM (Society of Indian Defence Manufacturers) list or any other similar industries / stocks allied  to the Defence sector.

"The Scheme offered being an open-ended scheme will offer Units for Sale / Switch-in and Redemption / Switch-out on every Business Day at NAV based prices when the Scheme re-opens for ongoing transactions (after the NFO).  As per SEBI (MF) Regulations, the Mutual Fund shall despatch redemption proceeds within 10 Business Days from the date of redemption. A penal interest of 15% or such other rate as may be prescribed by SEBI from time to time, will be paid by the AMC in case the redemption proceeds are not dispatched within 10 Business Days from the date of redemption. However, under normal circumstances, the Mutual Fund would endeavour to pay the redemption proceeds within 3-4 Business Days (as applicable) from the date of redemption," said the draft paper.

The Minimum Application Amount During NFO Period Purchase will be Rs 5,000 and any amount thereafter. During continuous offer period (after scheme re-opens for repurchase and sale) Purchase will be Rs 5,000 and any amount thereafter. Additional Purchase will be Rs 1,000 and any amount thereafter.