HDFC Defence Fund attracts investors with strong returns but faces expert caution on risks

HDFC Defence Fund, launched in June 2023, has attracted investor interest with a 46.87% compound annual growth rate (CAGR) since inception. The fund currently manages assets of Rs 4,647.38 crore but has faced challenges, including a 13.18% loss in the last six months. Experts advise caution with sectoral funds like HDFC Defence Fund due to their high risk and volatility. They recommend diversified equity mutual funds instead, as sector funds can lead to significant fluctuations in returns. The fund has shown strong performance since its launch, with a 52.05% return in 2023. However, it has underperformed its benchmark in recent months, raising concerns about its long-term viability as a standalone investment option.