Motilal Oswal Nifty India Defence Index Fund Direct Growth

Motilal Oswal Nifty India Defence Index Fund Direct Growth is a passively managed index fund designed to replicate the performance of the Nifty India Defence Index. The fund focuses on companies that are part of the defence sector in India, providing investors with exposure to a niche segment within the broader Indian economy. Launched with the objective of capitalizing on the growing opportunities in the defence sector, this fund is ideal for those looking for sector-specific investments aligned with India's national security and defence modernization efforts.

Investment Objective

The primary objective of the Motilal Oswal Nifty India Defence Index Fund is to track and replicate the performance of the Nifty India Defence Index, subject to tracking errors. This index includes a basket of Indian companies that are actively involved in manufacturing, development, and servicing of defence and aerospace equipment. The fund seeks to provide returns that closely correspond to the performance of the underlying index, making it suitable for investors seeking growth in the defence sector.

Minimum Investment & Lock-in Period

The Motilal Oswal Nifty India Defence Index Fund Direct Growth has no lock-in period, making it a flexible investment option for those seeking sectoral exposure without being bound by a fixed holding period. The minimum investment required to begin investing in this fund is generally low, starting at ₹500 for a lump-sum investment and ₹500 for Systematic Investment Plan (SIP) contributions, allowing both novice and seasoned investors to participate.

Holdings

The fund holds a diversified portfolio of companies within the Indian defence and aerospace sector. This may include leading players involved in defence manufacturing, engineering services, and related research and development. Companies within the portfolio are carefully selected based on their representation in the Nifty India Defence Index. Prominent names may include Bharat Electronics Ltd., Hindustan Aeronautics Ltd., and other defence PSUs, providing a robust exposure to India's rapidly growing defence industry.

Fund Managers

The fund is managed by a team of experienced professionals at Motilal Oswal Asset Management Company, who specialize in index fund management and passive strategies. Their role is to ensure that the fund tracks the performance of the Nifty India Defence Index as closely as possible, while minimizing tracking errors. The management team brings a wealth of expertise in index funds, ensuring efficient management and accurate replication of the underlying index.

1. Motilal Oswal Nifty India Defence Index Fund Direct Growth has ₹2875 Cr worth of assets under management (AUM) as on Mar 2025 and is more than category average.
2. The fund has an expense ratio 0.3.
   

Motilal Oswal Nifty India Defence Index Fund Direct Growth has given a CAGR return of -6.41% since inception.

Motilal Oswal Nifty India Defence Index Fund Direct Growth has allocated its funds majorly in Cash Equivalent, Industrial, Basic Materials, Tech, Consumer Cyclical. Its top holdings are Hindustan Aeronautics Ltd Ordinary Shares, Bharat Electronics Ltd, Solar Industries India Ltd, Mazagon Dock Shipbuilders Ltd, Bharat Dynamics Ltd Ordinary Shares

As it is a index funds mutual fund the taxation is as follows:
For short term (less than a year) capital gains will be taxed at 20%
For long term (more than 1 year) capital gains will be taxed at 12.5% without indexation benefit
Dividends will always be taxed at slab rate. Long term gains upto Rs 1 lakh are exempt capital gains tax.

The investment objective of the scheme is to provide returns that, before expenses, correspond to the total returns of the securities as represented by Nifty India Defence Total Return Index, subject to tracking error.

Minimum investment for lump sum payment is INR 500.00 and for SIP is INR 500.00. Motilal Oswal Nifty India Defence Index Fund Direct Growth has no lock in period.