HDFC Defence Fund increases stake in Bharat Dynamics and 3 others, trims exposure in 5 stocks in July

HDFC Defence Fund, the only actively managed fund based on the defence sector, increased its stake in Bharat Dynamics and three other stocks whereas it reduced its stake in five stocks in July.

Around 10.77 lakh shares of Bharat Dynamics were added to the portfolio taking the total number of shares to 17.10 lakh in July against 6.32 lakh in June. The other three stocks where the fund increased its stake were Bharat Forge, Data Patterns (India), and Astra Microwave Products.

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The fund added around 1.64 lakh shares of Bharat Forge in July, followed by 1.63 lakh shares of Data Patterns (India) and 1.33 lakh shares of Astra Microwave Products.

The exposure in five stocks was reduced in the said period which includes BEML, Diffusion Engineers, Rishabh Instruments, Power Mech Projects, and JNK India. Among these five stocks, the maximum number of shares of JNK India were offloaded from the portfolio of around 1.40 lakh and only 4,274 shares of Power Mech Projects were sold from the portfolio.

In July, only one new stock was added to the portfolio. Around 1.38 lakh shares of Cummins India were added to the portfolio in the said period. The fund made a complete exit from Bansal Wire Industries by selling 2.65 lakh shares in July.

The exposure in 15 stocks remained unchanged which includes Bharat Electronics, Larsen & Toubro, Centum Electronics, Cyient DLM, Hindustan Aeronautics, Interglobe Aviation, Dee Developments Engineers, Ideaforge Technology, and The Anup Engineering.

The defence fund had the same number of stocks in its portfolio in July as in the June month portfolio. The fund had 24 stocks in its portfolio in July.

The fund had an AUM of Rs 6,497 crore in July compared to an AUM of Rs 7,055 crore in June.

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HDFC Defence Fund is an open-ended equity scheme investing in Defence & allied sector companies. This defence fund has an investment objective to provide long-term capital appreciation by investing predominantly in equity and equity related securities of defence and allied sector companies.

Launched on June 2, 2023, the fund is benchmarked against Nifty India Defence - TRI and is managed by Rahul Baijal and Priya Ranjan.

The allocation in the capital goods sector was around 61.84% in July, followed by 16.66% allocation in chemicals. The allocation in electricals, automobiles and ancillaries, infrastructure, and aviation was around 6.54%, 3.82%, 3.34%, and 2.41% respectively in the same period.

Among the top 10 holdings, the fund had the highest allocation in Bharat Electronics of around 19.36%, followed by Hindustan Aeronautics of around 15.70% and Solar Industries where it had an allocation of 14.20%.

The fund holds 52% in large cap, 8.08% in mid caps, 34.52% in small caps, and 5.38% in others. On a broader term, the fund holds 94.62% in equity and 5.39% in others.

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On the performance front, the fund has delivered a return of 29.93% in the last three months and around 3.10% in the last one year. Since inception, the fund has delivered 45.63% CAGR.

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