Axis Nifty India Defence Index Fund: Invest in one of the top performing sectors

Axis MF has launched an NFO, Axis Nifty India Defence Index Fund. This passive fund will track Nifty India Defence Index. The Nifty India Defence Index which aims to track the performance of portfolio of stocks that represent the Defence theme. Defence has been one of the best performing industry sectors in the last 1 year (source: Advisorkhoj, as on 17^th April 2026). The NFO opened for subscription on 10^th April 2026 and will close on 24^th April 2026. In this article, we will discuss about Axis Nifty India Defence Index Fund NFO.

Why invest in defence sector?

• Global military spend reached a record $2.7 trillion in 2024 (source: SIPRI factsheet). Military spending has accelerated since the Russia Ukraine War started in 2022. Rising geo-political tensions, strategic competition between powers and modernization of armed forces are seen as the key factors driving higher military spending. At the same time, there is push towards self-reliance and indigenous manufacturing.


• India's defence budget has grown from Rs 2.5 trillion in FY 2013-14 to Rs 6.8 trillion in FY 2025-26 (source: Ministry of Defence, Press Information Bureau). Budgetary allocation to defence is 15% of Budget expenditure in FY 2026-27. This is the highest among all the ministries (source: Union Budget 2026).


• India's defence production has increased from Rs 79,071 crores in FY 2019-20 to Rs 1.5 lakh crores in FY 2024-25 (source: Ministry of Defence, Press Information Bureau). PSUs accounted for 77% of the total production, while the private sector is 23%. Share of private sector in defence production of 21% to 23%, showing the growing importance of private sector in defence production.


• India's defence exports reached a record Rs 23,622 crore in FY 2024-25 from less than Rs 1,000 crore in FY 2013-14 (source: Ministry of Defence, Press Information Bureau). India exports a diverse range of defence products, from complete systems to components.

Defence exports from India

India is exporting military equipment to more than 85+ nations across the world. Top 3 importers of Indian defence equipment are:-

Nifty India Defence Index outperformed the broad market index

The chart below shows the growth of Rs 10,000 investment in Nifty India Defence TRI and the broad market, Nifty 50 TRI, since the base date of the defence index. You can see that the defence index outperformed by the broad market index by a big margin.

Source: NSE, as on 31^st March 2026

The chart below shows the 3 year rolling returns of the Nifty India Defence TRI versus the broad market index, Nifty 50 TRI since the base date of the defence index. You can see that the defence index not only outperformed Nifty, but it also gave 20%+ CAGR returns in over 90% of the instances.

Source: Advisorkhoj Research, as on 31^st March 2026

Superior wealth creation through SIP

The chart below shows the growth of Rs 10,000 monthly SIP in the Nifty India Defence TRI versus the broad market index, Nifty 50 TRI since the base date of the defence index. You can wealth creation by the Nifty India Defence Index through SIP is much higher than Nifty 50 TRI.

Source: Advisorkhoj Research, as on 31^st March 2026

Index Composition

Source: Advisorkhoj Research, as on 31^st March 2026

Why invest in Axis Nifty India Defence Index Fund?

• India is focused on self-reliance offers increasing opportunity available for Indian defence players.


• India's strong economic growth and ongoing geopolitical tensions requires strong defence capabilities , which is being supported by growth in defence expenditure.


• India's defence equipment exports has shown robust growth, although from a smaller base.


• Shift from unipolar to multipolar world to aid increase in global defence expenditure over long term, which would help companies which export defence equipment.


• Nifty India Defence TRI has noted outperformance to the broad market index Nifty 50 TRI, while the recent market correction offers relatively better valuation multiples.

Who can find Axis Nifty India Defence Index Fund suitable?

• Investors looking for capital appreciation over long investment tenures


• Investors who want exposure to defence sector


• Investors who prefer low cost passive investments


• Investors with minimum 5 year investment horizon


• Investors with high risk appetites


• Investors who want to invest in defence theme through SIP in Axis Nifty India Defence Index Fund


• Investors should consult with their financial advisors or mutual fund distributors if Axis Nifty India Defence Index Fund is suitable for their investment portfolio.