NFO

NFO

NFO stands for New Fund Offer, and it is a process through which mutual fund companies introduce new schemes to investors. During an NFO, the fund house offers units of the new scheme to investors for the first time. NFOs are typically launched to take advantage of an investment opportunity or to meet the specific needs of investors.

During an NFO, investors can purchase units of the new scheme at the face value of Rs. 10 per unit. This is also known as the initial subscription price. After the NFO period ends, the units of the new scheme are available for purchase on the secondary market at the prevailing Net Asset Value (NAV) of the scheme. The NAV is calculated by dividing the total assets of the scheme by the number of units outstanding. Investors should carefully evaluate the investment objectives, investment strategy, and risk profile of a new scheme before investing in an NFO. While NFOs offer the opportunity to invest in a new scheme at the initial subscription price, they also come with a higher risk than established schemes. Additionally, investors should consider the track record of the mutual fund house launching the scheme and the credentials of the fund manager responsible for managing the scheme’s investments.