Motilal Oswal Nifty India Defence ETF delivers 41% return in 6 months. Check top 10 holdings

Motilal Oswal Nifty India Defence ETF has emerged as the top performer among defence-focused funds, delivering an absolute return of 41.15% over the past six months. Nearly six defence sector funds have now completed six months in the market.

Another offering from the fund house, the Motilal Oswal Nifty India Defence Index Fund, delivered 40.63% in the same period.

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Top 10 holdings of Motilal Oswal Nifty India Defence ETF

As of July 2025, Hindustan Aeronautics (HAL) was the largest holding in the Motilal Oswal Nifty India Defence ETF at 21.12%, followed by Bharat Electronics (21.06%) and Solar Industries (14.62%).

The fund also held 8.88% in Mazagon Dock Shipbuilders, 6.32% in Cochin Shipyard, and 6.30% in Bharat Dynamics. Other top holdings included Astra Microwave Products (3.43%), Data Patterns (3.30%), Garden Reach Shipbuilders (3.23%), and BEML (3.19%).

Performance

Since its inception, the ETF has returned 6.66%. Over the last year, it delivered 6.76% and about 18.04% in the past nine months. However, short-term performance has been weak, with losses of 12.05% in the past three months and 5.88% in the last month.

Other defence sector funds

Other defence-focused funds launched around the same period include Groww Nifty India Defence ETF, Aditya Birla SL Nifty India Defence Index Fund, Groww Nifty India Defence ETF FOF, and HDFC Defence Fund.

Among them, Groww Nifty India Defence ETF posted the second-highest return of 40.75% over six months, while Aditya Birla SL Nifty India Defence Index Fund and Groww Nifty India Defence ETF FOF delivered 40.31% and 40.11% respectively. HDFC Defence Fund, the only actively managed defence fund, generated 34.87% over the same period.

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Experts attribute the strong performance of defence funds to the recent surge in defence stocks, which had rebounded after a sharp sell-off earlier this year.

“Many countries, including India, are ramping up their military capabilities, driving higher defence spending. In India, this trend was further reinforced after Operation Sindoor, as the government looks to strengthen defence capabilities,” said Nilesh D Naik, Head of Business – Investments, Share.Market, in a recent interaction with ETMutualFunds.

Adding to the momentum, the government recently cleared a major deal for the Indian Air Force (IAF) to acquire 97 LCA Tejas Mark 1A fighter jets at a cost of Rs 62,000 crore, according to a report by ETMarkets. The approval, granted during a high-level meeting, paves the way for Hindustan Aeronautics Ltd (HAL) to begin production.

This is the second big procurement order for the Tejas Mark 1A. The first, placed a few years ago, was for 83 aircraft valued at around Rs 48,000 crore.