Defence ETFs gain up to 7% in two weeks amid India-Pakistan tensions

Defence sector-based ETFs gained up to 7% in the last two weeks amid the India-Pakistan tensions. There are two ETFs based on defence ETFs, and one is the ETF FoF.

Groww Nifty India Defence ETF and Motilal Oswal Nifty India Defence ETF delivered 6.73% and 6.74% returns, respectively, in the last two weeks. Groww Nifty India Defence ETF FOF gained 7.10% in the same time period.


Also Read | India-Pakistan Tensions: How should mutual fund investors respond to navigate geopolitical risk?

These schemes are benchmarked against Nifty India Defence - TRI, which went up by 6.75% in the similar time period.

The focus on defence stocks last week came after reports that the Modi government has called a meeting with defence makers next week. As markets closely watch developments along the border, investor sentiment has pivoted toward sectors considered resilient during geopolitical uncertainty.

According to a report by ET, defence stocks have gone up by 8% after a ceasefire between India and Pakistan brought a temporary calm to the border region and reignited optimism around increased military procurement.

In the last one week, these ETFs have gained up to 1% only. In the last three months, these defence sector-based ETFs delivered up to 19.56% return, with Motilal Oswal Nifty India Defence ETF being the topper. Groww Nifty India Defence ETF offered a 19.24% return,n whereas Groww Nifty India Defence ETF FOF offered a 19.24% return in the last three months.

India’s defence minister Rajnath Singh recently reiterated an ambitious export target of Rs 500 billion by FY29, more than double the current Rs 240 billion.

The defence sector-based ETFs in the one month have surged up to 16%, with Groww Nifty India Defence ETF FOF being the topper, which has delivered a 16.40% return in the same period.

Also Read | HDFC Defence Fund increases stake in HAL, Solar Industries, and 4 other stocks in April

“We are looking at the banks. But before the banks, as I said, defence. The defence sector, the IT sector, pharmaceutical sector will come first before we look at the banks, but yes, there are some opportunities in banking,” Mark Mobius, Chairman, Mobius Emerging Opportunities Fund told ET Now.