NFO or New Fund Offer refers to a new mutual fund scheme open to the public in the financial markets for the purpose of subscription for the first time. In other words, investors are offered a new mutual fund scheme based on a new investment strategy for a limited period. Asset Management Companies (AMCs) offer NFOs as new mutual fund products that previously did not exist as part of the product basket. NFOs are offered for both closed-ended and open-ended mutual fund schemes. In the former case, investors cannot invest after the NFO period is over and are required to stay invested till the maturity period is over; Whereas the latter may allow individuals to invest in units of the scheme when it re-opens for membership. Investing in NFOs depends on factors such as the risk appetite the investor is willing to take, and the value proposition offered.

The following can be seen as features of Mutual Fund NFOs:

NFOs offered by closed-ended mutual fund schemes allow investors to invest in new investment strategies that cannot be explored by existing mutual fund schemes.

A close-ended mutual fund scheme can launch an NFO when the market is at a peak. This can give investors the flexibility to choose when to invest their funds in the financial markets.

You will be able to buy the units of the scheme at the new fund offer price which is basically the per unit price that the investor has to pay for investing during NFO.

NFOs are offered by closed-ended fund schemes for a limited period of time, after which investors cannot buy new units until the scheme reaches its maturity. This can allow fund managers to select and track assets (securities or bonds) in a more streamlined manner.

After the NFO window of open-ended mutual fund schemes is closed, any purchase of units can be done at the NAV (Net Asset Value) of that particular scheme. The new fund offering here can help investors buy units at a comparatively nominal cost before the fund’s NAV is determined.

Investment in closed-ended funds can be done only through NFO. The nature of some close-ended funds when it comes to the holding period till maturity can help investors avoid panic sentiments and help them get returns commensurate with the risk involved at the time of maturity of the scheme. Is.

The timing of the launch of the NFO is important as it can give different results depending on the entry point of an investor. The investment objective of an NFO may not always suit one’s investment profile.

It can help investors to understand all the details about the NFO of a particular fund by doing a thorough study of the Scheme Information Documents (SIDs). This can help investors to make appropriate investment decisions. One can consider investing in NFOs if they feel they have a little more to offer than other existing funds and can help fill the gap in their investment portfolio.

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Disclaimer
An investor education initiative.
meeting www.icicipruamc.com/note To know more about the process of fulfilling the Know Your Customer (KYC) requirement for investing in mutual funds. Investors should deal only with registered mutual funds, details of which can be verified on SEBI website http://www.sebi.gov.in/intermediaries.html, For any queries, grievances and grievance redressal, investors may contact the AMC and/or Investor Relations Officers. In addition, investors can also file complaints on https://scores.gov.in If they are dissatisfied with the proposals made by the AMC. The SCORES portal allows you to register your complaint with SEBI online and view its status later.

Mutual fund investments are subject to market risks, read all the documents related to the scheme carefully.