Defence Sector Mutual Funds in India

1. BEML Ltd.

1. Bharat Dynamics Ltd.

1. Mazagon Dock Shipbuilders Ltd.

1. Solar Industries India Ltd.

1. Bharat Electronics Ltd. (BEL)

1. Hindustan Aeronautics Ltd. (HAL)

Important Things to Consider before Investing in Defence Mutual Funds

Some of the important things that must be considered before you invest in Defence Sector Mutual Funds are mentioned below:

1. Budget Allocation and Delays: In case the defence budget is reduced, these funds may be impacted.

1. Key Indicators: It is important to check the fund management expertise, expense ratio, exit load, and historical performance before investing in such funds.

1. Economic Uncertainty: In the case of any economic uncertainty, Defence Mutual Funds may be volatile and vulnerable.

1. Policy Changes: Defence stocks may be impacted by any policy changes.

1. Geopolitical Risks: In case of any geopolitical risks, defence stocks are vulnerable and these type of fund may be impacted.

Benefits of Defence Sector Mutual Funds

The main benefits of investing in Defence Sector Mutual Funds are mentioned below:

1. Diversification.

1. Strong returns.

1. Exposure to a high-growth sector.

Best Defence Sector Mutual Funds in 2026

The list of best defence sector mutual funds in 2026 are as follows:

1. Aditya Birla Sun Life Nifty India Defence Index Fund Direct Growth:

1. Minimum SIP amount is Rs.500

1. High risk fund

1. 12.83% of 1-month return

1. Fund size of Rs.292.50 crores

1. Expense ratio of 0.31%

1. Exit load is 0.05% if redeemed within 30 days

2. Motilal Oswal Nifty India Defence Index Fund Direct Growth:

1. Minimum SIP amount is Rs.500

1. High risk fund 

1. 12.84% of 1-month return 

1. Fund size of Rs.1970.40 crores 

1. Expense ratio of 0.29% 

1. Exit load is 1% if redeemed within 15 days 

3. Growth Nifty India Defence ETF FoF Direct Growth:

1. Minimum SIP amount is Rs.500

1. High risk fund

1. 12.35% of 1-month return

1. Fund size of Rs.26.46 crores

1. Expense ratio of 0.21%

1. Exit load is 1% if redeemed within 30 days

Points to note when investing in defence sector mutual funds:

Make a note of the below- listed points when investing in defence sector mutual funds:

1. Risk capacity: Before investing in any mutual fund, it is important for you to calculate your risk-taking capacity. Defence sector mutual funds are likely to be impacted by government decisions and geo-political policy changes. It is advisable to consider all the factors before investing in these mutual funds.

1. Investment duration: Investing in defence sector mutual funds for a short duration is not advisable, given the volatile nature of the industry. If you are planning a long-term investment and are taking a calculated risk, then this sector may be a good choice.

1. Portfolio diversification: These types of mutual funds are suitable for those investors who have a high-risk appetite and are looking for diversification in their portfolio.

1. Check the key indicators: Before making an investment in these mutual funds, check the key indicators like exit load, expense ratio, historical performance, etc.

Conclusion

Investing in Defence Sector Mutual Funds come with various benefits. However, it is vital that you do complete research before investing in these funds. It is important to check the fund management expertise, expense ratio, exit load, and historical performance before investing in such funds.