10 new mutual fund offers or NFOs currently open. Should you invest?
Mutual funds launch or offer new schemes to complete their bouquet of offerings or to offer an interesting theme or idea that may offer an opportunity to create wealth. These New Fund Offers or NFOs are a great draw among mutual fund investors.
Many investors choose an NFO because it is coming from their favourite fund houses or it’s managed by their favourite fund managers.
Some investors also believe that NFOs are cheaper because they offer the units at Rs 10. Well, these two reasons are not valid.
One, just because your favourite fund house has launched a scheme doesn’t mean that you should buy it. Sure, your favourite fund houses may be managing great schemes. However, there is no guarantee that the new scheme will also be a great investment. The same logic applies to the argument about your favourite fund managers.
Some investors also erroneously believe that schemes with NAVs of Rs 10 are better than schemes with higher NAVs. This belief was prevalent earlier. However, as awareness spread, this mistaken notion died its natural death. However, some new investors still fall for the sales pitch. An existing scheme with a long track record will have a higher NAV because it has already made investments and benefited from those investments. A new scheme, on the other hand, is still starting to invest. That’s why the NAV is Rs 10. It will collect money and then start investing.
One, just because your favourite fund house has launched a scheme doesn’t mean that you should buy it. Sure, your favourite fund houses may be managing great schemes. However, there is no guarantee that the new scheme will also be a great investment. The same logic applies to the argument about your favourite fund managers.
Some investors also erroneously believe that schemes with NAVs of Rs 10 are better than schemes with higher NAVs. This belief was prevalent earlier. However, as awareness spread, this mistaken notion died its natural death. However, some new investors still fall for the sales pitch. An existing scheme with a long track record will have a higher NAV because it has already made investments and benefited from those investments. A new scheme, on the other hand, is still starting to invest. That’s why the NAV is Rs 10. It will collect money and then start investing.
So, should you invest in an NFO? It is always better to invest in schemes with a long performance record. This is because you have some historical data to base your investment decision. You don’t have any data when it comes to new offerings. Most mutual fund experts say you may consider investing in a new scheme if it offers something unique or new that is not available in the market.
Here are the new Fund Offers currently open for your perusal.
| Scheme Name | Category | NFO Open Date | NFO Close Date |
| WOC Balanced Advantage Fund-Reg(G) | Balanced Advantage Fund | 20-Jan-2023 | 03-Feb-2023 |
| Tata Multicap Fund-Reg(G) | Multicap Fund | 16-Jan-2023 | 30-Jan-2023 |
| Aditya Birla SL Multi Asset Allocation Fund-Reg(G) | Multi Asset Allocation Fund | 11-Jan-2023 | 25-Jan-2023 |
| HSBC Multi Cap Fund-Reg(G) | Multicap Fund | 10-Jan-2023 | 24-Jan-2023 |
| UTI FTIF-XXXV-III(1176D)(G) | Fixed Maturity Plan | 17-Jan-2023 | 24-Jan-2023 |
| Baroda BNP Paribas NIFTY SDL December 2026 Index Fund-Reg(G) | Gilt Fund | 16-Jan-2023 | 23-Jan-2023 |
| Kotak FMP-306-90D(G) | Fixed Maturity Plan | 20-Jan-2023 | 23-Jan-2023 |
| ICICI Pru FMP-88-1192D-R(G) | Fixed Maturity Plan | 17-Jan-2023 | 23-Jan-2023 |
| SBI FMP-76-1221D-Reg(G) | Fixed Maturity Plan | 18-Jan-2023 | 23-Jan-2023 |
| Kotak Nifty 1D Rate Liquid ETF | ETFs | 18-Jan-2023 | 23-Jan-2023 |
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