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Defence themed funds attract strong post Budget investor interest
Defence mutual funds have rallied sharply post Budget, but analysts advise caution for 2026 as valuations rise and investors balance growth potential with diversification.
Defence focused mutual funds have surged up to 21% since the last Union Budget, driven by higher capital allocation, strong order inflows and policy support. The sector benefits from indigenisation, long term visibility and improving balance sheets. However, the experts caution valuations are stretched and returns may moderate in 2026, urging investors to maintain diversification and staggered investments rather than chasing momentum.