Axis MF launches defence index fund to tap India’s structural growth opportunity

Axis Mutual Fund has launched the Axis Nifty India Defence Index Fund, an open-ended index fund tracking the
Nifty India Defence Total Return Index, aimed at capturing long-term structural growth in the defence sector.

The NFO will open from April 10 to April 24, 2026. The fund seeks to deliver returns that closely correspond to the performance of the index, subject to tracking error.

The launch comes amid a sustained rise in global defence spending, which has crossed USD 2.7 trillion in 2024, driven by geopolitical tensions and a transition toward a multipolar global order.

India is also witnessing a strong upcycle in defence, supported by increased budgetary allocations, policy reforms, higher FDI limits, and a push for domestic manufacturing and exports.

India’s defence budget has grown nearly 2.7 times since FY14 to ₹6.8 lakh crore in FY26. Domestic production has nearly doubled in the last five years and is targeted to double again by 2029. Exports have surged from under ₹2,000 crore in FY17 to over ₹23,000 crore in FY25.

The index tracked by the fund includes companies engaged in aerospace, shipbuilding, explosives, and allied defence services, with free-float market capitalisation weighting and semi-annual rebalancing.

The fund will be managed by Nandik Mallik and Rohit Gautam and follows a passive strategy.

Commenting on the launch, B. Gopkumar, MD & CEO, Axis AMC, said,
“India’s defence sector is undergoing a multi-year transformation, supported by rising budgets, strong policy intent, and expanding export opportunities. Through the Axis Nifty India Defence Index Fund, we are offering investors a low-cost, rules-based way to participate in this structural growth theme. This fund is well-suited for investors with a long-term perspective who are looking to align their portfolios with India’s strategic and manufacturing priorities.”