HDFC Defence Fund
Direct · GrowthAI Summary
HDFC Defence Fund has delivered strong returns, with a 1Y SIP XIRR of 32.5% and 3Y SIP XIRR of 29.79%, far outpacing the thematic category averages of 11.76% and 16.45% respectively. Calendar year returns have been consistently positive, ranging from 9.78% in 2025 to 53.02% in 2023. The 3Y rolling return mean of 40.06% indicates robust lump-sum performance across rolling windows.
The fund shows a modest maximum drawdown of -0.35% with a recovery in 88 days, though the 235-day drawdown duration and 3 drawdown events exceeding 10% suggest periodic volatility typical of a thematic fund. Calmar ratios of 1.066 (1Y) and 1.17 (3Y) indicate healthy risk-adjusted returns relative to drawdown depth. Investors should note that a concentrated sector theme can experience sharper corrections during defense sector downturns.
The portfolio is heavily concentrated in Aerospace & Defense at 44.1%, with Bharat Electronics (14.87%), Bharat Forge (12.91%), and Hindustan Aeronautics (12.61%) as the top holdings. With only 22 total holdings and the top 10 accounting for roughly 79% of NAV, the fund is focused rather than diversified. Auto Components (18.2%) and Chemicals (13.0%) provide some exposure beyond pure defense.
The fund is a clear category leader, with a 100% consistency score over both 12-month and 24-month periods and current top fund status. Its 3Y XIRR of 29.79% nearly doubles the category average of 16.45%. This sustained outperformance reflects the strong tailwinds in India's defense indigenization theme over the past few years.
This fund suits investors with high risk tolerance who believe in the long-term India defense manufacturing growth story and can tolerate sector concentration risk. A time horizon of at least 5-7 years is advisable given the thematic nature and potential for sharp sector cycles. It should be treated as a satellite allocation rather than a core portfolio holding.
- Exceptional outperformance vs category: 3Y SIP XIRR of 29.79% versus the category average of 16.45%
- 100% consistency score over 12-month and 24-month periods, indicating reliable top-quartile performance
- Strong risk-adjusted returns with Calmar ratios above 1.0 across both 1Y and 3Y horizons
- Heavy sector concentration with 44.1% in Aerospace & Defense exposes investors to theme-specific downturns
- Top 10 holdings comprise roughly 79% of NAV across only 22 stocks, limiting diversification; recent calendar year returns (9.78% in 2025) show the theme can cool after peak years like 2023's 53.02%
Generated on 13-10-2026, 3:13 AM. Verify before investing.
Gives more importance to longer time periods (10Y, 20Y) than shorter ones (1Y, 3Y). This balances out recent outperformance and gives a more realistic picture of what long-term returns might look like.
The largest peak-to-trough decline in the fund's NAV. Shows the worst-case loss an investor would have experienced at any point in the fund's history.
If you invested ₹1,00,000 every month via SIP, here's how this fund has historically performed across different time horizons.
| Duration | Invested | Median Value | XIRR | Min XIRR | Max XIRR |
|---|---|---|---|---|---|
| 1 Year | ₹12.00 L | ₹13.62 L | 38.8% | -39.0% | 181.0% |
| 3 Years | ₹36.00 L | ₹54.31 L | 29.8% | 22.6% | 34.5% |
SIP returns vs benchmark & category
Annualised SIP return (XIRR) over each rolling horizon — like-for-like, not lump-sum.
| Duration | Fund SIP XIRR | Category avg |
|---|---|---|
| 1 Year | 38.8% | 11.7% |
| 3 Years | 29.8% | 16.4% |
| Duration | Mean | Median | Min | Max | Sharpe | Sortino | % Positive | Cat. Mean | Cat. Median |
|---|---|---|---|---|---|---|---|---|---|
| 1 Year | 36.7% | 22.3% | -1.4% | 147.0% | 0.85 | 24.40 | 99% | — | — |
| 3 Years | 40.1% | 41.0% | 34.8% | 45.1% | 11.70 | — | 100% | — | — |
Calmar Ratio by Duration
| # | Stock | % of NAV |
|---|---|---|
| 1 | Bharat Electronics Ltd. | 14.87% |
| 2 | Bharat Forge Ltd. | 12.91% |
| 3 | Hindustan Aeronautics Limited | 12.61% |
| 4 | Solar Industries India Ltd. | 10.28% |
| 5 | Astra Microwave Products Ltd. | 6.44% |
| 6 | BEML Limited | 5.11% |
| 7 | MTAR Technologies Limited | 5.09% |
| 8 | Eicher Motors Ltd. | 4.67% |
| 9 | Bosch Limited | 4.10% |
| 10 | Bharat Dynamics Limited | 3.19% |