In Indian middle-class culture, expenditures are often slightly higher than income. However, saving has become increasingly important in the daily lives of Indians. Nowadays, mutual funds have long been regarded as a robust investment tool for long-term wealth creation. They offer investors the allure of stock market returns coupled with the power of compounding. However, several schemes have generated remarkable returns for investors within a short span of just one year.
The HDFC Defence Fund has delivered a staggering 79.73% return to its investors over the past year. This impressive performance has transformed an initial investment of ₹10 lakh into approximately ₹17.97 lakh today. The current Net Asset Value (NAV) of the HDFC Defence Fund stands at ₹21.33, with a total fund size of ₹3,996.82 crore.
#BestOfTheWeek | HDFC Silver ETF, the topper in the category, offered 31.54% return in 2024 so far. The scheme had an AUM of Rs 320 crore as on September 30, 2024.#mutualfunds https://t.co/oWa3TfO5lU
— ET Mutual Funds (@ETMutualFunds) November 2, 2024
The HDFC Defence Fund strategically invests in stocks of 21 companies within the defence sector, including prominent names such as Bharat Electronics Limited, Hindustan Aeronautics Limited, Solar Industries India, and InterGlobe Aviation. Notably, the largest portion of the fund’s capital—19.50%—is allocated to Bharat Electronics Limited.
Investors should be mindful of the tax regulations governing the HDFC Defence Fund. If funds are withdrawn within one year, a 1% exit load applies. Additionally, profits realized within this timeframe are subject to a 20% capital gains tax. For withdrawals made after one year, if the profit exceeds ₹1.25 lakh, a tax rate of 12.5% will be levied.
The HDFC Defence Fund’s extraordinary performance exemplifies the potential of mutual funds to generate significant wealth for investors, although it is essential to recognize the accompanying risks associated with short-term investments.