Defence stock rally spells relief for dedicated mutual fund schemes

A sharp rebound in defence stocks has helped sector-focused mutual fund schemes recover steep losses, offering relief to investors who entered after the 2024 peak

The India-Pakistan tensions and the subsequent rally in defence stocks has brought relief to defence mutual fund (MF) scheme investors, many of whom entered the theme after it had run up substantially.

 

Defence funds, most of which were launched last year and were also able to attract strong inflows, were caught on the wrong side of the market as the correction in defence stocks in the second half of the 2024-25 (FY25) brought their net asset values (NAVs) below the launch level of ₹10.

 

The defence sector, among the smallest in terms of investment universe, witnessed the first dedicated MF