What Is an NFO? Should New Investors Consider It?
MC Desk | January 9, 2025
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An NFO, or New Fund Offer, is the first-time subscription offer for a new mutual fund scheme.
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Fund houses launch NFOs to raise money from investors for creating a portfolio of stocks, bonds, or other securities.
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NFOs can be open-ended or close-ended. Open-ended funds allow ongoing investments, while close-ended funds have a fixed maturity.
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Typically, NFO units are priced at Rs 10 during the launch phase.
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NFOs often attract investors with themes, sectors, or strategies not covered by existing mutual funds.
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Experts suggest NFOs may not always be the best choice for beginners due to the lack of a performance track record.
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Before investing in an NFO, compare it with similar existing mutual funds for better insights.
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Ensure the NFO’s objectives align with your investment goals and risk appetite.
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Check for expense ratios and other charges that may impact returns in the long run.
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NFOs can be an opportunity, but new investors must tread carefully and prioritise informed decision-making.
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The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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