Mutual Fund News: There are currently 10 new mutual fund offerings or NFOs open. Should You Invest?

Many mutual fund investors consider investing in an NFO or new fund offering because it comes from their favorite fund houses or is managed by their favorite fund managers. Some investors also believe that NFOs are cheaper because they offer the units for 10 rupees.

Mutual funds launch or offer new programs to complete their offering or to offer an interesting topic or idea that may present a wealth-building opportunity. These new fund offerings, or NFOs, are a huge draw for mutual fund investors.

However, just because your favorite fund house has a program in place doesn’t mean you should invest in it. Sure, your beloved fund houses might be running some great programs. However, there is no guarantee that the new program will be a great success. The same logic applies to the dispute over your dear fund managers.

Also, some investors mistakenly believe that plans with NAVs of Rs 10 are better than plans with higher NAVs. This belief used to be widespread. However, as awareness spread, this misconception died a natural death. However, some new investors still fall for the sales pitch. An existing system with a long track record of success will have a higher NAV because it has already made investments and benefited from those investments. A new system, on the other hand, is still beginning to invest. Therefore, the NAV is Rs 10. It raises money and then starts investing.

So should you invest in an NFO? It’s always better to invest in systems with a long track record. This is because you have some historical data to support your investment decision. You have no data for new offers. Most mutual fund experts say you might consider investing in a new system if it offers something unique or new that isn’t available in the market.

Here are the new fund listings that are currently open for review.

Source: ACE MF, data as of February 21, 2023