3 years ago

4 key factors to consider before investing in NFOs

2021 witnessed a spate of New Fund Offers launched by mutual fund houses to raise capital. Riding on the back of a sharp market rally and rising interest from retail investors, asset management companies launched 140 NFOs last year, raising capital to the tune of close to ₹1 lakh crore. While the primary objective of both is to raise money from markets, the NFO price is generally close to the fund’s fair value. Thoroughly analyse the new scheme Don’t rush to pour your money into an NFO just because the units are available at a cheap price. Consider the expenses and the AMC’s history Expenses associated with an NFO can eat away a significant portion of returns and must be evaluated carefully.

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