What is New Fund Offers – NFO?

New Fund offers in mutual funds are like IPO for shares, where the fund houses come up with an investment proposal and public can subscribe to it.

What are NFOs?

  • An NFO or New Fund Offer is offered by Asset Management Company (AMC).
  • It is an invitation to the investors to subscribe to the units of a newly launched fund.
  • These are launched to introduce a new investment theme that any of AMCs existing funds do not offer.
  • A contribution is made to the pool of investment that is yet to be invested by subscribing to NFO.

How to Analyse an NFO (Checklist)

  • Asset Management Company (AMC): Good experience (At least 10 years), Good growth in its Asset Under Management (AUM), Lower expense ratio, Good portfolio of existing funds.
  • Fund Manager
  • Investment Strategy: Does the offering meets your investment needs (theme).
  • Load: Different funds have different exit loads.
  • Risk and Return Potential.

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