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What is NFO?

A new fund offer (NFO) is a first-time subscription offer for a new scheme that has been launched by an asset management company. The fund house can launch an NFO around a theme or simply to complete their product basket. Once the NFO is over, the fund will reopen for subscription again and investors have the option to subscribe at the prevailing net asset value (NAV).

NFO (New Fund Offering) Mutual Fund

Fund/Scheme Name Fund Category Fund Sub-Category Open Date Close Date Fund Manager Action
ITI Pharma and Healthcare Fund (G) Equity Sectoral / Thematic Oct 18, 2021 Nov 01, 2021 Pradeep Gokhale INVEST
Aditya Birla SL NASDAQ 100 FOF (G) Others FoFs Overseas Oct 15, 2021 Oct 29, 2021 Vinod Narayan Bhat INVEST
DSP Nifty 50 Equal Weight ETF Others ETFs Fund Oct 18, 2021 Oct 29, 2021 Anil Ghelani INVEST
ICICI Pru Smallcap Index Fund (G) Others Index Fund Oct 12, 2021 Oct 26, 2021 Kayzad Eghlim INVEST
ICICI Pru Consumption ETF Others ETFs Fund Oct 18, 2021 Oct 25, 2021 Kayzad Eghlim INVEST
NJ Balanced Advantage Fund (G) Hybrid Dynamic Asset Allocation or Balanced Advantage Oct 08, 2021 Oct 22, 2021 Rishi Sharma INVEST

Steps to invest in NFO through ICICIdirect.com

  • Step 1 Login to your ICICIdirect.com account
  • Step 2 Go to Mutual Funds
  • Step 3 Select a NFO/FMP under Mutual Funds login page
  • Step 4 Provide investment details and confirm

Comparing NFO with Equity IPO

An equity IPO is done by a single company, which often seeks capital for expansion or to give an exit to an existing investor. On the other hand, an NFO from a mutual fund collects money from investors and allocates that to a basket of securities (stocks or bonds or government securities and so on), based on a stated strategy.

A complete guide for mutual fund investments. Click on the link to read the ICICIdirect Monthly MF Report.

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Mahindra Manulife Flexi Cap Yojana NFO with Mr. Krishna Sanghavi, Chief Investment Officer – Equity, Mahindra Mutual Fund

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Axis Consumption ETF NFO by Mr. Shane Vaz, Senior Product Manager – Axis Asset Management Company
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ICICI Prudential Flexicap Fund NFO by Mr. Chintan Haria – Product Development & Strategy, ICICI Prudential AMC Ltd.
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Podcast on IDFC US Equity Fund of Fund NFO

FAQs

What is NFO?
A new fund offer (NFO) is a first-time subscription offer for a new scheme that has been launched by an asset management company. The fund house can launch an NFO around a theme or simply to complete their product basket. Once the NFO is over, the fund will reopen for subscription again and investors have the option to subscribe at the prevailing net asset value (NAV)
With the help of an NFO, the fund house raises money from the public to purchase securities such as equity shares, bonds, and so on, in the market. New fund offer allows the fund house to raise money to complete its basket of offerings as per SEBI category classification. For example if an AMC does not have a Multicap fund, it can launch an NFO to offer that product to investor. Sometime NFOs are launched as fund management team believes there are good investment opportunities prevalent relating to a particular theme at that point in time. You need to put in your judgment and wisdom before settling for one.
  • Fund House Reputation
  • Fund Objective
  • Theme of NFO
  • Asset Allocation
  • Risk factor
  • Cost of investment
  • Minimum subscription Amount
  • Investment Horizon
  • Risk classification
Before investing in NFOs one should consider one’s own investment objective, investment horizon and own asset classification. If the NFOs objective and other factors are in line with your own objective, horizon and asset allocation than only you should invest in an NFO or else should give it a miss
In a new fund offer, the opportunity to subscribe to the scheme is available only for a limited period usually 30days. The investors may purchase units of the mutual fund scheme during the pre-defined period and subscribe to the NFO at an offer price. This is usually fixed at Rs 10.
The process of allotment of Units generally gets completed within 5 (five) business days from the date of closure of the New Fund Offer Period. The asset management company issues units in dematerialized form to a unit holder in a scheme within two working days of the receipt of request from the unit holder
In an open ended scheme, redemption and switch out gets commenced not later than 5 business days from date of allotment. It is advised to re-evaluate your options in case the preferred NFO investment horizon happens to be longer than your investment horizon.
In terms of SEBI regulations, a complete statement of the Scheme portfolio will be sent to all unit holders, within ten days from the close of each month whose email addresses are registered with the Mutual Fund. AMC will disclose the portfolio within ten days from the close of the month in which the NFO period was closed. Example, if NFO was closed on 15th March, AMC will disclose the portfolio closer to 10th April
The overall cost involved in investment is one of many parameters that decide your potential returns. All the expenses relating to the NFO are borne by the Asset management company and investors do not have any additional charge for investing. Once the NFO opens up, expense ratio up to 2.25% of the assets can be charged by the AMC depending on the quantum of assets garnered during the NFO.

Disclaimer:

ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025. Tel: (91 22) 6807 7100, Fax: (91 22) 6807 7803. I-Sec is a SEBI registered with SEBI as a Research Analyst vide registration no. INH000000990. AMFI Regn. No.: ARN-0845. We are distributors for Mutual funds. Mutual Fund Investments are subject to market risks, read all scheme related documents carefully. Please note, Mutual Fund related services are not Exchange traded products and I-Sec is just acting as distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon.

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