New Funds Offering
When a fund house issues units for the first time or raises fresh funds for a new theme, it is referred to as an NFO or a new fund offering. Quite often, retail investors prefer an NFO over buying mutual funds via the continuous window from the AMC. Some investors also invest in an NFO assuming that it is almost similar to an equity IPO issued by companies. That is not correct. In recent times, SEBI has become stricter with respect to the criteria for issuing NFOs and AMCs are not allowed to issue NFO on duplicate themes.
If the NFO is a closed ended scheme, the fund will not open for subscription again. Mutual fund investor who subscribe to new fund offering of a close ended mutual fund scheme has to remain invested in the fund till the scheme maturity date.
Things to Consider as an Investor
- The reputation of the Fund House
- Objectives of the Fund
- Fund’s Theme
- Risk Factor
- Investment Horizon
Cost
of Work
NFOs are launched to introduce new investment options to the market. AMCs create NFOs to offer investors access to unique investment strategies, asset classes, or market segments that are not covered by existing mutual fund schemes.
NFOs can be launched for various types of mutual funds, including equity funds, debt funds, hybrid funds, thematic funds, sector-specific funds, and more. The specific type of fund launched depends on the AMC’s investment strategy and market opportunities.
The risk associated with an NFO is similar to that of any mutual fund scheme. It depends on the underlying investments and the investment strategy of the fund. It is important to carefully review the scheme’s offer documents, including the scheme information document (SID), and understand the associated risks before investing.
Get started with investment in Best NFO
Call expert
+91 88630 13888
Write email
contact@abadanifinserv.in
Visit office
Ward 8, Loyabad, Po - Bansjora, Dhanbad, Jharkhand - 828101
