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New Fund Offer
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Okay lets get started.
We have heard a term called *Initial Public Offer* (IPO). Right?
When a company wants to offer shares to the public, they normally do an IPO.
Similarly, when AMCs wants to bring a new mutual fund scheme, they come up with a *New Fund Offer* or NFO
Like IPO, AMCs have to file a draft prospectus with SEBI and get its approval before launching a new scheme.
Generally, we might not need an NFO because almost all AMCs already have many schemes, each of which serve a purpose.
Also, it is always better to invest in a scheme that is already established than going for a new scheme.
An established scheme will have a fund manager who has experience in managing the scheme.
Being an experienced scheme, there will be some corups already in place and new SIP money will keep flowing in.
Established schemes would have lower expenses.
So it is better to look in existing schemes of the AMC than to subscribe for an NFO.
All we have to do is to go though the scheme details, analyze them and then go for the one that suits you.
If you are still interested, check AMFI NFO Page at https://www.amfiindia.com/new-fund-offer
Most schemes are close-ended schemes though.
Related Topics
- Introduction to Mutual Funds
- Mutual Fund Units
- Net Asset Value or NAV
- Know Your Customer / KYC
- Expense Ratio
- Systematic Investment Plan and Compounding effect
- Systematic Transfer Plan (STP)
- Systematic Withdrawal Plan (SWP)
- SIP vs Lumpsum Investments
- Open-ended, Close-ended and Interval schemes
- DIRECT plan vs REGULAR plan
- GROWTH option vs DIVIDEND option