HDFC Mutual Fund will not register new systematic investment plans (SIPs) for HDFC Defence Fund from July 22, 2024. The fund has already stopped accepting new lump sum investments, including switch-ins and new Systematic Transfer Plan (STP) registrations.
However, SIPs and STPs registered before July 22 will continue without interruption.
HDFC Mutual Fund is dealing with challenges related to managing funds due to concerns about valuations. Consequently, the fund house has limited SIP investments to Rs 10,000 per month in this sectoral fund.
Advertisement
What is HDFC Defence Fund?
HDFC Defence Fund is a mutual fund focused on investing in defense and related sectors for long-term capital growth.
The fund is managed by Abhishek Poddar, who serves as the Fund Manager and Senior Equity Analyst at HDFC AMC. The fund’s performance is benchmarked against the Nifty India Defence Index TRI.
The fund manages assets worth Rs 3,233 crore and tracks Nifty India Defence Total Return Index.
Why do fund houses restrict new investments?
Fund houses limit inflows to a scheme when opportunities to invest new funds become limited due to high valuations or other factors. Recently, many small-cap funds have also restricted new investments. However, HDFC Defence Fund might be the first scheme to stop new SIP registrations.
Also Read: India Joins JP Morgan’s Bond Index: What It Means for Investors and the Economy
According to HDFC Mutual Fund, there are no restrictions on redeeming, switching out, or systematic transfer plan (STP) withdrawals from the scheme. All other terms and conditions outlined in the scheme information document (SID) and key information memorandum (KIM) will remain unchanged.
Existing investors can maintain their SIPs and systematic transactions without disruption to their investment strategies. However, new investors interested in entering the HDFC Defence Fund through SIPs or lump sum investments will need to consider alternative funds or await further updates from HDFC Mutual Fund.
Want to learn the art and science of managing your money? The 1% Club can help. Details here
