NFO investment strategies: How to make an informed decision

nfo investment strategies
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Investing in mutual funds has gained momentum among new and seasoned investors alike. However, many investors continue to have questions about what are new fund offers (NFOs) and how NFO in mutual funds are different from regular mutual funds.
In this article, we will look at some of the most commonly asked questions about NFOs, how you can invest in an NFO, and what are the factors to consider when doing so.

  • Table of contents:
  1. What is an NFO in mutual funds?
  2. NFO vs. existing mutual fund schemes
  3. Factors to consider before investing in NFOs
  4. How to invest in an NFO?
  5. Schemes by Bajaj Finserv AMC
  6. FAQ

What is an NFO in mutual funds?

An NFO, or a New Fund Offer, is the first-time subscription offer for a new scheme launched by a mutual fund company. With NFO, investors are offered units of a mutual fund.

NFO vs. existing mutual fund schemes

Existing mutual fund schemes have a proven track record, a visible past performance, and an existing portfolio that investors can carefully examine before investing. On the other hand, NFOs are new offerings with no track record. This can sometimes make it difficult for investors to judge whether or not an NFO is worth purchasing.

Factors to consider before investing in NFOs

Investing in NFO in mutual fund can be appealing, especially because of the units being available at face value. However, as mentioned earlier, there is no proven track record or past performance that you can refer to assess the credibility of the fund. Mentioned below are some important criteria to consider before investing in an NFO:
Fund objective: It is crucial to understand the investment objective of the NFO, the strategy of the fund manager, the kind of securities invested in, and whether these align with your goals and risk tolerance.
Fund house reputation: Consider the track record of the asset management company that is launching the NFO. In case of a new AMC, you can consider the parent company’s reputation and performance in other sectors.
Fund manager's competence: Do your research about the fund manager who will be managing the NFO. Their past performance in managing other funds can be a good indicator of their skills and competence.

How to invest in an NFO?

Investing in an NFO is a simple process and it can be done either online or offline. Some of the key steps to invest in an NFO are the following:
Select the right NFO: Do your research and select an NFO that aligns with your investment objectives.
Complete the KYC process: If you are a first-time investor, complete the Know Your Customer (KYC) process, which includes providing your identity proof, address proof, and a photograph. If you have already been investing, you can skip this step.
Application form: Fill out the application form (either online or offline) provided by the fund house. Ensure that you read the offer document carefully before investing.
Payment: You can make the payment through the preferred mode. Once the payment is processed, the units will be allotted to your account.

Schemes by Bajaj Finserv AMC

If you decide to invest in an NFO in mutual fund, you can invest in Bajaj Finserv Flexi Cap Fund with Bajaj Finserv AMC. This scheme is an open-ended equity scheme investing in equity and equity-related instruments across large cap, mid cap, small cap stocks. This fund is suitable for investors who are seeking wealth creation/capital appreciation over the long term. Additionally, Bajaj Finserv AMC has also launched overnight fund, liquid fund, and money market fund.

Investments in NFO carry their own set of risks, being new schemes in the market. As with any investment, make sure to do your research thoroughly, understand your investment goals and risk tolerance, and seek the advice of a professional before venturing into an NFO in mutual funds. A careful approach, coupled with thorough knowledge, is the best way to grow your wealth.


Why should I consider investing in an NFO?

An NFO provides the investor with an opportunity to invest in new mutual fund scheme. It also provides with an opportunity to become an investor at the face value of the scheme.

How much should I invest in an NFO?

The amount you should invest in an NFO depends on lots of factors such as financial goals, risk appetite and financial objectives. Diversifying your investments in the early stage can be a wise strategy to avoid huge risks.

What is the ideal investment horizon for investing in mutual fund scheme?

There is no definite answer to this. However, it is recommended to hold mutual fund schemes for a longer period. This is especially true for funds that are unique or new. This will allow time to test the performance of a fund that does not have a past track record.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
This document should not be treated as endorsement of the views / opinions or as an investment advice. This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy. The recipient should note and understand that the information provided above may not contain all the material aspects relevant for making an investment decision. Investors are advised to consult their own investment advisor before making any investment decision in light of their risk appetite, investment goals and horizon. This information is subject to change without any prior notice.