A New Fund Offer (NFO) is the initial launch of a new mutual fund scheme by an asset management company (AMC). It allows investors to subscribe to the fund at its base price, typically ₹10 per unit, before it gets listed and starts trading in the market. An NFO is similar to an IPO (Initial Public Offering) in the stock market but applies to mutual funds.
There are two types of NFOs:
- Open-Ended NFOs – After the NFO period ends, the fund remains open for continuous purchases and redemptions.
- Closed-Ended NFOs – Once the NFO period closes, investments are locked in for a fixed tenure, and units can only be sold on the stock exchange if the fund is listed.
How to Apply for an NFO?
You can invest in an open NFO through Systematic Investment Plan (SIP) or Lumpsum, just like any other mutual fund investment. Simply proceed to place your order as usual when the NFO is open for subscription. Once the fund is launched, it will follow the standard NAV calculation process based on SEBI regulations.
A New Fund Offer (NFO) is the initial launch of a new mutual fund scheme by an asset management company (AMC). It allows investors to subscribe to the fund at its base price, typically ₹10 per unit, before it gets listed and starts trading in the market. An NFO is similar to an IPO (Initial Public Offering) in the stock market but applies to mutual funds.
There are two types of NFOs:
- Open-Ended NFOs – After the NFO period ends, the fund remains open for continuous purchases and redemptions.
- Closed-Ended NFOs – Once the NFO period closes, investments are locked in for a fixed tenure, and units can only be sold on the stock exchange if the fund is listed.
How to Apply for an NFO?
You can invest in an open NFO through Systematic Investment Plan (SIP) or Lumpsum, just like any other mutual fund investment. Simply proceed to place your order as usual when the NFO is open for subscription. Once the fund is launched, it will follow the standard NAV calculation process based on SEBI regulations.
