New Fund Offer (NFO)
A New Fund Offer (NFO) is the first subscription offering for any new mutual fund being launched by an investment company. Similar to an Initial Public Offering (IPO), an NFO allows investors to purchase units of a mutual fund at the subscription price, usually set at Rs. 10 per unit. NFOs provide an opportunity to invest in new themes, strategies, and emerging sectors. Both open-ended and closed-end funds can be launched via NFOs for a limited time period, after which the mutual funds are traded in the market based on their Net Asset Value (NAV). Investing in NFOs can be profitable as investors get access to units at a nominal cost, potentially realizing substantial capital gains once the mutual fund starts trading in the open market