Published: 14th Aug 2024
By: Value Research
Aditya Birla Sun Life Nifty India Defence Index NFO opened for subscription on August 9, 2024, and will remain available until August 23, 2024. It will be a passively managed thematic fund that will replicate the Nifty India Defence Total Return Index (TRI).
NFO period August 9 to August 23, 2024 Benchmark Nifty India Defence TRI Fund manager(s) Haresh Mehta and Pranav Gupta Exit load 0.05 per cent of the applicable NAV if redeemed before 30 days. No exit load after that. Tax treatment If units are sold within a year, capital gains will be taxed at 20 per cent. If units are sold after a year, capital gains will be taxed at 12.5 per cent. However, gains of up to Rs 1.25 lakh are tax-exempt.
The Nifty India Defence TRI was established on April 2, 2018. It comprises companies that earn at least 10% of their revenue from the defence sector. The index is reconstituted twice a year and each constituent company cannot have more than 20% weightage, determined by its market value.
Since inception, the Nifty India Defence TRI delivered an annualised return of 37%, more than double that of the Nifty 500’s 16.5%. Yet, a closer look at the graph shows that the defence index trailed the Nifty 500 between April 2018 and June 2022. It was only due to the government’s push for indigenisation and boost in defence exports that the index began outperforming the Nifty 500.
Given the defence index’s impressive returns, should you consider investing in the Aditya Birla Sun Life Nifty India Defence Index Fund? Though investing in the fund may seem appealing, there are certain risks you need to be mindful of. To find out what these risks are, read the full story by clicking the link below.