New Delhi: The mutual fund market has seen a 23 percent increase YoY, as per the data obtained from the Association of Mutual Funds of India (AMFI). Total assets under management (AUM) rose to Rs 65.74 lakh crore, approximately $770 million. Within it, the defence sector has been an outlier, recording a return as high as 32 percent in the last 6 months. Thereby, defence sector-focused mutual funds have started attracting serious interest from investors in India. These funds invest directly in companies that are involved in the manufacturing of national security and infrastructure growth. These funds fall into the category of high risk as they focus only on one single theme. These funds are best suited for investors with a high-risk appetite and a focus on long-term investment.
The following is a list of 5 mutual funds that are currently operating in the defence domain that have given higher returns in the last 6 months.
Launched on 21 August 2024, Motilal Oswal Nifty India Defence ETF is a very high-risk mutual fund scheme. It has given a return of 32.43 percent. It is designed to take advantage of India’s growing defense sector. It tracks the Nifty India Defense TRI Index. The total fund is worth Rs 463 crore, and it has not completed 1 year. The fund comes with a low expense ratio of 0.41 percent, making it cost-effective for long-term investors. An investment can be made from as low as Rs 500.
Grow Nifty India Defence ETF was launched by Grow Mutual Fund on October 8, 2024. It tracks the Nifty India Defence TRI Index and falls under the ‘very high risk’ category as per the Riskometer. As of May 31, 2025, the fund manages assets worth Rs 183 crore with an expense ratio of 0.43%, making it a moderately low-cost option for investors looking to invest in the country’s growing defense industry.
Motilal Oswal launched this mutual fund scheme on 3 July 2024. It is an open-ended scheme. In the last 6 months, this fund has given a return of 31.92 percent. The fund has given a return of 13.27 percent since its inception while tracking the Nifty India Defense TRI Index; it falls in the ‘very high’ risk category. As of May 31, 2025, this fund had acquired assets of Rs 3,776 crore, which shows strong interest from investors. With an expense ratio of 1.10%, it is expensive compared to its competitors.
This fund was launched by Grow Mutual Fund on October 11, 2024. It is an open-ended scheme. Since its launch, the fund has delivered a strong return of 28.41 percent, tracking the performance of the Nifty India Defense TRI Index. Categorized under the ‘very high’ risk level, this fund targets investors looking for growth through investments in India’s defense sector. As of May 31, 2025, it manages assets of Rs 61 crore and has an expense ratio of 0.63%.
The fund is an open-ended scheme launched by Aditya Birla Sun Life Mutual Fund on August 30, 2024. It has delivered a return of 31.59 percent in the last six months. Since its inception, the fund has delivered a return of 23.89 percent. It tracks the Nifty India Defense TRI Index. It falls in the ‘very high’ risk category, suitable for aggressive investors with a long-term horizon. As of May 31, 2025, the fund has assets under management of Rs 664 crore and an expense ratio of 1.06%, indicating strong interest despite relatively high costs.
(Source: Value Research)
