A New Fund Offer (NFO) in mutual funds signifies the introduction of a new fund. Investors may be the first to invest in the fund and explore its development potential from the start. NFOs can broadly be divided into three types: close-ended NFO, open-ended NFO, and Exchange-Traded NFO. Investing in an NFO may have several benefits, investors can diversify their portfolios and potentially benefit from unique investment strategies. However, NFOs in mutual funds may have certain disadvantages, including overvaluation risk and higher charges. Moreover, investors cannot analyse the historical performance of a NFO before investing, making it difficult to assess the fund’s consistency.
What is a New Fund Offering in India?
