What is an NFO? New Fund Offer Meaning, Types & Process

What is an NFO? New Fund Offer Meaning, Types & Process

  1. An NFO (New Fund Offer) is used to offer units of a mutual fund scheme to public investors for the first time. 


  2. NFOs, except for ELSS (Equity-Linked Savings Schemes), can remain open for a maximum of 15 days. 


  3. The allotment of units or refund of the amount is done within five business days after the scheme's closure. 


  4. An NFO is announced by an AMC (Asset Management Company) to raise capital for launching a new mutual fund scheme. 


  5. It provides all the essential information about the fund, such as the shares to be purchased, details of the fund manager, and the benchmark against which the fund will be measured. 


  6. NFOs are primarily of two types: open-ended and close-ended.

    • Related Articles

    • How does the mutual fund industry work in India?

      The mutual fund industry in India is a well-regulated ecosystem that pools money from investors and invests it in various financial instruments such as stocks, bonds, money market instruments, and other securities. It allows investors to participate ...

    • What are the risks involved in mutual fund investments?

      Mutual funds are professionally managed and regulated, but like all investments, they come with certain risks. Understanding these risks can help you make smarter decisions based on your goals and risk appetite. Here are the key types of risks ...

    • What is the role of a mutual fund distributor?

      A mutual fund distributor is an individual or entity that acts as an intermediary between mutual fund companies (Asset Management Companies or AMCs) and investors. Their primary role is to help investors choose suitable mutual fund schemes and ...

    • Can I switch from one mutual fund to another?

      Yes, you can switch from one mutual fund to another, but the process varies depending on the type of funds and the investment platform you are using. Here’s a detailed breakdown of how it. 1. Switching Within the Same Fund House (Same AMC) If both ...

    • How do I choose the right mutual fund for my investment goals?

      Choosing the right mutual fund involves aligning your investment with your specific financial goals, risk appetite, and investment horizon. Since mutual funds are available in various types, it is important to understand the purpose of each and how ...