India’s defence sector continues to attract investor interest in 2025, driven by domestic manufacturing, the “Make in India” initiative, and rising exports. Defence-themed mutual funds provide an opportunity for investors to participate in this growth story.
| Name | 1Y Returns (%) | AUM (₹ Cr) | Expense Ratio (%) | Alpha | Sharpe Ratio | NAV (₹) |
| Motilal Oswal Nifty India Defence Index Fund | 29.93 | 3,703.30 | 0.44 | 7.26 | 0.91 | 10.57 |
| Aditya Birla SL Nifty India Defence Index Fund | 29.18 | 651.03 | 0.31 | 7.03 | 0.89 | 11.53 |
| Groww Nifty India Defence ETF FoF | 28.58 | 78.84 | 0.21 | 7.03 | 0.88 | 11.84 |
| HDFC Defence Fund | 21.29 | 7,024.28 | 0.75 | 4.50 | 0.74 | 25.28 |
Note: Data as of October 29, 2025.
HDFC Defence Fund has the highest AUM at ₹7,024 crore, reflecting strong investor confidence. Its actively managed approach focuses on strategic stock selection across the defence value chain. The higher expense ratio of 0.75% supports active management aimed at generating superior long-term returns.
Motilal Oswal leads the category with 29.93% one-year returns, supported by an alpha of 7.26 and a Sharpe ratio of 0.91, indicating strong risk-adjusted performance. Its low expense ratio of 0.44% makes it a cost-efficient choice for passive investors seeking exposure to defence stocks.
Aditya Birla SL ranks close behind Motilal Oswal with 29.18% returns and an expense ratio of 0.31%. The fund efficiently tracks its benchmark index and offers strong risk-adjusted returns, making it an attractive option for cost-conscious passive investors.
Groww Defence ETF FoF has the lowest expense ratio at 0.21%, providing a highly cost-effective route to defence sector exposure. While its AUM is modest at ₹78.84 crore, its returns and risk metrics remain competitive, appealing to investors preferring a simple, index-based approach.
HDFC Defence Fund has the highest AUM at ₹7,024 crore, reflecting strong investor confidence. Its actively managed approach focuses on strategic stock selection across the defence value chain. The higher expense ratio of 0.75% supports active management aimed at generating superior long-term returns.
Read More: Top Equity Mutual Funds with Highest 5-Year CAGR for November 2025.
Defence mutual funds have gained traction as India strengthens its manufacturing base and export capabilities. Index-based funds like Motilal Oswal and Aditya Birla SL deliver robust performance at moderate costs, while HDFC Defence Fund caters to investors seeking active management.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Oct 30, 2025, 7:14 PM IST
Akshay Shivalkar
Akshay Shivalkar is a financial content specialist who strategises and creates SEO-optimised content on the stock market, mutual funds, and other investment products. With experience in fintech and mutual funds, he simplifies complex financial concepts to help investors make informed decisions through his writing.
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