Motilal Oswal Asset Management Company (MOAMC) has listed the Motilal Oswal Nifty India Defence ETF on the National Stock Exchange (NSE) with the trading symbol MODEFENCE. This marks India’s first-ever Defence ETF.Agra Investment

Key features of the ETF

The Motilal Oswal Nifty India Defence ETF tracks the Nifty India Defence Index, which comprises 15 defence-related companies.

These companies are also part of the Nifty Total Market Index. The ETF aims to mirror the performance of these stocks, subject to tracking errors.

However, investors should note that there is no guarantee the ETF will achieve its investment objectives.

The defence sector in India has shown decent returns.Kolkata Investment

As of July 31, 2024, the Nifty India Defence Index delivered 159.3% returns over the past year and 92.0% over the last three years.

Why consider investing in defence?

India’s defence sector presents a significant growth opportunity, driven by government policies prioritising national security and technological advancements.

According to Nomura Research, the sector is expected to see a pipeline of $138 billion in investments from FY24 to FY32.

The Government of India has imposed an import embargo on over 4,600 defence items by December 2027, pushing the nation towards self-reliance in defence manufacturing, under the ‘Atmanirbhar Bharat’ initiative.Pune Wealth Management

Additionally, the government aims to double defence exports in the next three to four years.

Market experts highlight that companies in the defence sector have strengthened their balance sheets and profitability due to increased exports and government spending.

Prateek Agrawal, MD & CEO of Motilal Oswal AMC, noted, "Defence stocks are a preferable investment choice due to India❼progress towards self-reliance in defence, advancements in technology, and increased government spending in the sector. We believe the sector is well-positioned for long-term growth."

Pratik Oswal, Chief of Business Passive Funds at Motilal Oswal AMC, added, "India❼manufacturing capabilities in defence are advancing rapidly, presenting significant long-term opportunities for investors. Our Defence ETF aims to provide a pathway for investors to participate in India❼journey towards self-reliance in this crucial sector."

Investment considerations

Investing in the Motilal Oswal Nifty India Defence ETF offers a unique opportunity to gain exposure to India’s burgeoning defence sector.

However, potential investors should be aware of the higher volatility associated with defence stocks.Hyderabad Stocks