HDFC Defence Fund raises stakes in BEL, BEML, Bharat Forge and 2 others in October

HDFC Defence Fund, the only actively managed fund focused on the defence sector, increased its stakes in Bharat Electronics (BEL), BEML, Bharat Forge and two other stocks in October, according to its monthly portfolio disclosed by ACE MF.

The fund added 30.18 lakh shares of BEL, taking its total holding to 4.70 crore shares in October, compared with 4.40 crore in the previous month. It also added 59,938 shares of BEML, taking its total holding to 30.10 lakh shares in October, against 29.50 lakh shares in September.

The fund added around 48,000 shares of Bharat Forge, taking its total holding to 77.50 lakh shares in October. It also added 1.42 lakh shares of Tata Motors, taking its total holding to 30.46 lakh shares.


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The fund also added 13,004 shares of Bosch, taking its total holding to 1.13 lakh shares.

It added three new stocks to its portfolio: Bonfiglioli Transmissions, PTC Industries and Tonbo Imaging India. The fund bought 4.55 lakh shares of Bonfiglioli Transmissions, valued at Rs 28.47 crore.

The defence sector fund also added 23,742 shares of PTC Industries and 14.54 lakh shares of Tonbo Imaging India in October. It neither reduced its exposure to any stock nor exited any holding completely.

As a percentage of NAV, the fund had the highest allocation to Bharat Electronics at around 15.63%, followed by Hindustan Aeronautics at 13.54%, Bharat Forge at 11.98% and Solar Industries at 10.13%.

In October, the fund held 27 stocks in its portfolio, compared with 24 in the previous month. Its portfolio was spread across seven sectors, with the highest allocation to capital goods at around 54.31%.

Automobiles and ancillaries accounted for 23.23% of the portfolio, followed by chemicals at 12.47% and electricals at 4.40%. The fund also had allocations of 2.94% to shipbuilding, 1.11% to telecom and 0.58% to infrastructure.

By market capitalisation, the defence sector fund held 45.25% in large-cap stocks, 22.6% in mid-cap stocks, 28.89% in small-cap stocks and 3.26% in others.

The fund had assets under management (AUM) of Rs 11,130 crore as of October 2026. Launched on June 2, 2023, it is benchmarked against the Nifty India Defence TRI and managed by Rahul Baijal and Priya Ranjan.

The fund has completed over three years in the market but has underperformed its benchmark over the longer term, while outperforming it over shorter periods.

In the last three months, the fund delivered a negative return of 4.82%, compared with a loss of 7.50% by the benchmark. Over the last six months, it returned 5.50%, while the benchmark posted a loss of 4.08%.

In the one-year period, the fund gained 19.63%, against 13.53% by the benchmark. However, over the last three years, it delivered a return of 33.12%, compared with 39.08% by the benchmark. Since its inception, the fund has delivered returns of 35.79%.

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HDFC Defence Fund is an open-ended equity scheme investing in defence and allied sector companies. Its investment objective is to provide long-term capital appreciation by investing predominantly in equity and equity-related securities of companies operating in the defence and allied sectors.

The fund is suitable for investors seeking long-term capital appreciation or income through investments predominantly in equity and equity-related instruments of defence and allied sector companies.

(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own and do not represent those of The Economic Times)

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