This is turning out to be one of the best years for NFO (new fund offer) collections for the mutual fund industry. Collections have been the second highest in seven years. However, what makes this year stand out is the wide variety of funds that were launched. The focus was clearly on the low-cost passively-managed index and exchange traded funds (ETFs). There were several international funds as well as sector and theme-based schemes thrown into the mix. In the coming days, more thematic funds may get launched, as MFs have filed applications. These include offbeat themes such as funds focused on electric vehicles, semiconductors and blockchains.
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SBI Mutual Fund's balanced advantage fund collected Rs 14,551 crore, which is the largest-ever amount for any new fund launch. The NFO benefitted from SBI's 24,000 branches across the country. A well-managed balanced advantage fund would help investors deal with market volatility by increasing debt exposure when equity valuations turn expensive and vice-versa.
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ICICI Mutual Fund launched a flexicap scheme in June 2021. The fund collected Rs 9,808 crore, which was the highest-ever NFO collection for any open-end equity scheme. A flexicap scheme gives the fund manager the flexibility to allocate freely among large, mid and small-caps. This was a new category introduced by SEBI to allow mutual funds to reposition their multi-cap funds. ICICI MF continued with its existing multi-cap fund.
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NJ Mutual Fund, which is backed by country's largest distributor, NJ Wealth, collected Rs 5,216 crore in its first NFO - NJ Balanced Advantage Fund. This is the highest collection for a maiden scheme launched by any fund house. NJ MF will be rolling out rule-based funds.
ICICI Business Cycle Fund collected Rs 4,185 crore in its NFO, making it the largest business cycle fund in the industry. The fund invests in sync with economic cycles. It takes a top-down approach in that it first identifies sectors that are expected to do well, before zeroing in on the right stocks and building the scheme portfolio around them.
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Kotak Multicap fund collected Rs 3,510 crore, which is the highest-ever NFO collection for Kotak MF.
Jash Kriplani is a journalist with over ten years of experience. Based in Mumbai. Covering mutual funds, personal finance. His last stint was with Business Standard, where he covered mutual funds and other developments in the financial markets
