📊 Thematic · Defence, PSU & Manufacturing Funds

Best Defence, PSU & Manufacturing Funds in India - Compare Top 5

Compare the best defence, PSU and manufacturing funds in India - HDFC Defence, SBI PSU, Aditya Birla PSU, Axis Manufacturing and ICICI Prudential PSU. India's defence spending boom and manufacturing PLI theme. Live NAV from RightAdvise.

5Funds Compared
₹26.3K CrCombined AAUM
15 Jun 2026Data As Of
FreeNo Login Needed
All data pulled live from RightAdvise database  ·  NAV updated daily  ·  AAUM from latest AMFI quarterly filing  ·  Returns calculated from daily NAV history
Comparison

Top 5 Defence, PSU & Manufacturing Funds - At a Glance

Sorted by 5-year CAGR. Click any fund for full analysis - rolling returns, drawdown chart, NAV history and risk ratios.

1
Aditya Birla Sun Life PSU Equity Fund
Aditya Birla MF  ·  ABSL PSU expertise · Diversified PSU coverage · Includes defence and energy PSUs
NAV
₹39.63
1Y Return
+9.6%
3Y CAGR
+27.3 % p.a.
5Y CAGR
+24.0 % p.a.
AAUM
₹5.7K Cr
Risk
Very High
Deep Dive →
2
SBI PSU Fund
SBI MF  ·  Largest PSU fund · Pure play on government-owned companies · Covers defence PSUs heavily
NAV
₹38.46
1Y Return
+9.0%
3Y CAGR
+29.8 % p.a.
5Y CAGR
+23.8 % p.a.
AAUM
₹6.0K Cr
Risk
Very High
Deep Dive →
3
HDFC Defence Fund
HDFC MF  ·  India's largest pure defence fund · Direct play on India's defence modernisation · HDFC research depth
NAV
₹28.67
1Y Return
+12.1%
3Y CAGR
+41.8 % p.a.
5Y CAGR
-
AAUM
₹7.7K Cr
Risk
Very High
Deep Dive →
4
Axis India Manufacturing Fund
Axis MF  ·  PLI-driven manufacturing theme · Quality manufacturing companies · Broad sector coverage
NAV
₹15.40
1Y Return
+11.7%
3Y CAGR
-
5Y CAGR
-
AAUM
₹5.0K Cr
Risk
Very High
Deep Dive →
5
ICICI Prudential PSU Equity Fund
ICICI Prudential MF  ·  ICICI Pru research · Government enterprise focus · Includes defence and energy PSUs
NAV
₹22.71
1Y Return
+5.6%
3Y CAGR
+25.5 % p.a.
5Y CAGR
-
AAUM
₹1.9K Cr
Risk
Very High
Deep Dive →
Performance

₹1 Lakh Invested - How It Grew

If you had invested ₹1 lakh 5 years ago in each fund, here is how much it would be worth today. Calculated from 5 years of daily NAV in the RightAdvise database.

5-Year Growth of ₹1 Lakh Direct Plan · Growth Option · All funds rebased to ₹1,00,000
Data Table

Full Comparison Table

💡 What is AAUM? AAUM stands for Average Assets Under Management - the average value of all investor money a fund managed during a specific quarter. Reported to SEBI every quarter via AMFI. More reliable than a single-day AUM snapshot.

FundNAVAAUM1Y Return 3Y CAGR 5Y CAGR 10Y CAGR Max Drawdown Sharpe (3Y)
Aditya Birla Sun Life PSU Equity Fund ₹39.63 2026-06-12 ₹5.7K Cr Jan–Mar 2026 +9.6% +27.3 % p.a. +24.0 % p.a. - -33.8% 1.03
SBI PSU Fund ₹38.46 2026-06-12 ₹6.0K Cr Jan–Mar 2026 +9.0% +29.8 % p.a. +23.8 % p.a. +16.0 % p.a. -47.1% 1.17
HDFC Defence Fund ₹28.67 2026-06-12 ₹7.7K Cr Jan–Mar 2026 +12.1% +41.8 % p.a. - - -34.5% -
Axis India Manufacturing Fund ₹15.40 2026-06-12 ₹5.0K Cr Jan–Mar 2026 +11.7% - - - -23.0% -
ICICI Prudential PSU Equity Fund ₹22.71 2026-06-12 ₹1.9K Cr Jan–Mar 2026 +5.6% +25.5 % p.a. - - -23.0% 1.07
⚠️ Data Note: Returns (what is CAGR?) calculated from daily NAV data in RightAdvise database. AAUM from official AMFI quarterly filings. Max Drawdown calculated over full available NAV history. Sharpe Ratio uses 3-year daily NAV and 6.5% risk-free rate. Educational purposes only. Past performance does not guarantee future returns.
Education

What Are Defence, PSU & Manufacturing Funds?

Defence, PSU and Manufacturing Funds are classified as thematic or sectoral funds that must invest at least 80% of their assets in equity of companies in their specific theme. PSU funds invest in government-owned public sector undertakings. Defence funds invest in companies supplying to India's defence sector. Manufacturing funds invest in companies benefiting from India's manufacturing push including PLI scheme beneficiaries. All are high-concentration, high-risk thematic funds.

Defence, PSU and manufacturing are three of the hottest investment themes in India today. India's defence sector is undergoing a historic transformation - the government has mandated indigenisation of defence procurement, pushing ₹1.75 lakh crore in annual defence spending toward domestic companies. HAL, BEL, BEML, Bharat Dynamics, Cochin Shipyard and Mazagon Dock are among the key beneficiaries. The PLI (Production Linked Incentive) scheme is simultaneously boosting manufacturing across electronics, pharmaceuticals, textiles, automotive and specialty chemicals.

PSU funds invest in government-owned companies across sectors - NTPC, Power Grid, Coal India, ONGC, HPCL, BHEL, SBI, Bank of Baroda. These companies have historically been undervalued relative to private sector peers but are now re-rating as the government focuses on improving PSU governance, dividends and returns. The PSU re-rating theme - combined with defence indigenisation and manufacturing PLI - creates a powerful multi-year thematic investment opportunity for patient investors willing to accept high concentration risk.

✅ Why Consider Defence, PSU & Manufacturing Funds

  • India's defence budget at ₹6.2 lakh crore - with 75% earmarked for domestic procurement
  • PLI scheme across 14 sectors creating multi-year manufacturing investment opportunities
  • PSU re-rating underway - government improving governance, dividends and capital allocation
  • China+1 strategy - global companies diversifying supply chains to India creates manufacturing demand
  • India's defence exports target of $5 billion by 2025 - creating new revenue streams for defence PSUs

⚠️ Key Risks to Know

  • Policy risk - all three themes are government policy-dependent; policy changes hurt sharply
  • Extreme concentration in government-driven themes - susceptible to policy disappointments
  • Defence and PSU stocks already re-rated significantly - valuation risk is real
  • Execution risk - defence indigenisation and PLI timelines are subject to delays
  • PSU governance improvements may be slower than market expects - management quality risk

✅ Suitable For

  • Investors with 7-10 year horizon and conviction in India's defence and manufacturing story
  • Those who want exposure to PSU re-rating and defence indigenisation simultaneously
  • Experienced thematic investors using this as a satellite (10-15%) in their portfolio
  • Those who believe India's manufacturing and defence themes have multi-year runway remaining

❌ May Not Be Suitable For

  • Conservative or first-time investors - extreme concentration and policy sensitivity
  • Those who cannot handle 40-50% corrections if government policy shifts
  • Investors who want this as their primary or only equity fund
  • Those with short investment horizons under 5 years

🎯 India's Defence Indigenisation - Why It Is a Multi-Decade Theme

India was the world's largest arms importer for most of the past two decades - buying from Russia, Israel, France and the US. The government has made a dramatic strategic shift: mandating that 75% of defence procurement come from domestic companies by 2025-2026 and targeting ₹1.75 lakh crore in domestic defence production. This is not a short-term budget cycle - it is a multi-decade structural shift driven by national security imperatives. Companies like HAL (aircraft), BEL (electronics), Bharat Dynamics (missiles), Cochin Shipyard and Mazagon Dock (warships) are the primary beneficiaries. Defence funds investing in this ecosystem are betting on one of India's most powerful and durable structural investment themes.

📖 Learn the Metrics
CAGR, Sharpe Ratio, Sortino & Std Dev - Explained
What do these numbers actually mean? Read before you invest.
📖 Learn the Metrics
Drawdown & Rolling Returns - Explained Simply
Why max drawdown and rolling returns reveal more than CAGR.
Common Questions

Defence, PSU & Manufacturing Fund FAQs

HDFC Defence Fund is currently India's largest and most established pure-play defence sector fund. SBI PSU Fund and Aditya Birla Sun Life PSU Equity Fund offer PSU-focused exposure that includes defence companies alongside energy, banking and other government enterprises. Axis India Manufacturing Fund covers the broader manufacturing PLI theme. Compare their returns and risk in the table above.
No - they overlap but are different. PSU funds invest specifically in government-owned companies (public sector undertakings) across sectors including banking, energy, mining and defence. Defence funds invest in companies supplying to India's defence sector - which includes both PSUs (HAL, BEL, Bharat Dynamics) and private companies (L&T defence, Paras Defence). A PSU fund gives broad government enterprise exposure; a defence fund gives specific defence sector exposure.
Three factors: government's defence indigenisation mandate driving guaranteed domestic revenue for defence PSUs; PSU governance improvements raising dividend payouts and improving capital allocation; and broader market re-rating of government enterprises as sentiment shifted from private sector preference to PSU value. After years of underperformance, PSU stocks corrected significantly - then re-rated as the bull case materialised.
Defence PSU stocks have rallied 100-300% from their 2020 lows, raising valuation concerns. The structural long-term themes (defence indigenisation, manufacturing PLI) remain intact but returns from current levels may be more moderate than from 2020-2023. SIP approach is safer than lump sum at current valuations. Always assess valuations before investing in any thematic fund after a large run-up.
AAUM (Average Assets Under Management) is the average corpus of the fund across an entire quarter, as officially reported to AMFI. All AUM data on RightAdvise is from official AMFI quarterly AAUM disclosures.
⚠️ RightAdvise.com is NOT registered with SEBI. All content is for educational purposes only. Mutual Fund investments are subject to market risks. Please read all scheme-related documents carefully and consult a SEBI-registered investment advisor before investing.
Free Newsletter

Stay Updated on Mutual Funds

New fund analysis, articles and market insights - no spam, no selling. Unsubscribe anytime.

Found this useful? Share it

WhatsApp LinkedIn X / Twitter