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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
Aditya Birla SL Multi-Cap Fund (G) Equity Multi Cap Fund Apr 19, 2021 May 03, 2021 Mahesh Patil INVEST
Mirae Asset NYSE FANG+ ETF Fund of Fund (G) Others FoFs Domestic Apr 19, 2021 May 03, 2021 Ekta Gala INVEST
ITI Ultra Short Duration Fund - Reg (G) Debt Ultra Short Duration Fund Apr 19, 2021 May 03, 2021 Vikrant Mehta INVEST
BNP Paribas Funds Aqua Fund of Fund (G) Others FoFs Overseas Apr 16, 2021 Apr 30, 2021 Abhijeet Dey INVEST
HDFC Asset Allocator Fund of Funds (G) Others FoFs Domestic Apr 16, 2021 Apr 30, 2021 Anil Bamboli INVEST
Mirae Asset NYSE FANG+ ETF Others ETFs Fund Apr 19, 2021 Apr 30, 2021 Siddharth Srivastava INVEST
TRUSTMF Liquid Fund - Regular (G) Debt Liquid Fund Apr 08, 2021 Apr 22, 2021 Anand Nevatia INVEST
Aditya Birla SL FTP - Series TF (G) Debt Fixed Maturity Plans Apr 15, 2021 Apr 22, 2021 Mohit 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.

Videos

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Exclusive podcast on HDFC Asset Allocator FoF NFO by Mr. Ashok Kanawala, Vice President - Products & Distributor Alliances, HDFC AMC

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. NFO is cheaper than the existing funds as it is new to the market. They are comparable with the Initial Public Offering (IPOs) in which the public can purchase shares before getting listed on the exchange. Also, a whole range of marketing efforts that go into their promotion makes it a too-good-to-miss opportunity. However, sometimes, you need to put in your judgment and wisdom before settling for one.
  • Fund House Reputation
  • Fund Objective
  • Theme of NFO
  • Returns
  • Risk factor
  • Cost of investment
  • Minimum subscription Amount
  • Investment Horizon
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. NFO is cheaper than the existing funds as it is new to the market. They are comparable with the Initial Public Offering (IPOs) in which the public can purchase shares before getting listed on the exchange. Also, a whole range of marketing efforts that go into their promotion makes it a too-good-to-miss opportunity. However, sometimes, you need to put in your judgment and wisdom before settling for one.
NFOs also come with lock-in periods ranging from three to five years. In such cases, you will be required to stay invested for the entire tenure. Ensure that your investments are in line with your investment horizon and goals.
In a new fund offer, the opportunity to subscribe to the scheme is available only for a limited period. 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. Once the tenure expires, the investors would be able to purchase the fund units at the specified price.
Once you have subscribed to a mutual fund scheme, you may not be able to redeem your units before maturity. In some cases, you could also be charged a pre-exit fee (exit load) for the same. It is advised to re-evaluate your options in case the preferred NFO happens to be longer than your investment horizon.
The overall cost involved in investment is one of many parameters that decide your potential returns. Though there is no entry load, some NFOs charge exit loads if you happen to redeem units before the completion of the tenure. If the lock-in period is longer than your investment horizon, then your returns can be affected on account of the exit loads. The expense ratio – the annual fee charged by the fund house for managing your money – is another crucial parameter. It is advised to check if the expense ratio is lower or equal to what SEBI mandates.
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