The Economic Times

Defence funds deliver 19% returns in 2026, HDFC Defence Fund leads. Should investors chase the rally or stay cautious?

Defence sector funds have delivered strong returns in 2026, averaging nineteen percent year-to-date. HDFC Defence Fund led this category with a notable twenty-four point five one percent gain. Experts cite increased defence spending and government policies supporting domestic manufacturing. Investors should review their existing allocation and avoid chasing recent sharp rallies. A five percent allocation cap is suggested for most investors in this sector.