How are funds deployed after an NFO closes?
Jan 24, 06:01

The money received in a new fund offer isn't deployed immediately by the scheme manager. The fund manager is allowed to invest these funds over a period of six months. There may be situations where the stock markets are trading at expensive valuations, and the fund manager may want to wait for prices to correct before deploying the money. Till the funds are fully deployed, the funds can be parked in the Tri-Party Repo Market (TREPs). However, in the case of passive schemes – exchanged traded funds (ETFs) and index funds – the money is deployed quickly as a delay could prevent the fund from tracking the underlying index.

Once new fund offer closes