A new fund offer (NFO) is the initial subscription offer for a newly launched scheme by asset management firms (AMCs). A new fund offering is launched on the market to raise capital from the public in order to purchase securities such as stocks, government bonds, etc. from the market.
An NFO is similar to an IPO in that it attempts to raise capital from the market. NFOs are offered for a specified time frame. This means that investors who wish to invest in these schemes at the offer price may only do so during the specified time frame. After the New Fund Offer period, investors can only purchase these funds at the prevailing NAV.
Let’s take a look at the list of top 10 NFO for October 2022
| Scheme | Open Date | Closed Date |
|---|---|---|
| Aditya Birla Sun Life Multi-Index Fund Of Funds | 26th Sep | 10th Oct |
| HDFC NIFTY 200 Momentum 30 ETF | 26th Sep | 3rd Oct |
| HDFC NIFTY100 Low Volatility 30 ETF | 26th Sep | 3rd Oct |
| ICICI Prudential Nifty Auto Index Fund | 26th Sep | 6th Oct |
| Kotak Nifty SDL Plus AAA PSU Bond Jul 2028 60:40 Index Fund | 29th Sep | 10th Oct |
| Motilal Oswal Gold and Silver ETFs Fund of Funds | 26th Sep | 7th Oct |
| SBI CRISIL IBX Gilt Index – April 2029 Fund | 26th Sep | 3rd Oct |
| Aditya Birla Sun Life CRISIL IBX Gilt – April 2026 Index Fund | 28th Sep | 6th Oct |
| SBI CRISIL IBX SDL Index – September 2027 | 26th Sep | 3rd Oct |
| Edelweiss CRISIL IBX 50:50 Gilt Plus SDL April 2037 Index Fund | 27th Sep | 6th Oct |
Let’s take a look at the 10 NFOs available for investing in October 2022
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Aditya Birla Sun Life Multi-Index Fund Of Funds
An open-ended fund of funds scheme investing in Exchange Traded Funds (ETFs) and index funds. The scheme’s primary objective is to generate capital appreciation by investing in passively managed instruments such as ETFs and index funds of equity and equity-related instruments (domestic index funds and ETFs as well as overseas ETFs), fixed income securities, and Gold/Silver.
The scheme will feature a regular plan and a direct plan with a common portfolio and distinct NAVs. On the application form, investors must select the plan to which they are subscribing. A direct plan is only available to investors who purchase/subscribe to units in a scheme directly from the mutual fund and is unavailable to investors who invest via a distributor.
Minimum Application Amount
- During New Fund Offer Period: Minimum of Rs.100/- and in multiples of Rs. 1/- thereafter during the New Fund Offer period.
- During Ongoing Offer period:
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- Fresh Purchase (Incl. Switch-in): Minimum of Rs. 100/- and in multiples of Rs. 1/- thereafter
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- Additional Purchase (Incl. Switch-in): Minimum of Rs.100/- and in multiples of Rs.1/- thereafter
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- Repurchase for all plans/options: In multiples of Rs. 1/- or 0.001 units
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HDFC NIFTY 200 Momentum 30 ETF
An open-ended scheme replicating/tracking NIFTY200 Momentum 30 Index. The Scheme’s investment objective is to provide investment returns that, excluding expenses, correspond to the total returns of the securities as represented by the NIFTY 200 Momentum 30 Index, subject to tracking errors.
Minimum Application Amount
- During NFO Period: Rs. 500 per application, then in multiples of Rs. 1 thereafter. The units will be allocated in whole numbers, and the remainder will be refunded. In the case of investors opting to switch into the Scheme from existing HDFC Mutual Fund Schemes (subject to completion of the Lock-in Period, if any) during the NFO Period, the application will be processed for the eligible amount, and the excess amount will be refunded.
- On an Ongoing Basis
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- Directly with the Fund – Market Makers/Large Investors: Only Market Makers (in Creation Unit Size) and Large Investors (with a Minimum application amount of Rs. 25 Crores and in multiples of Creation Unit Size) may approach the Fund directly for subscription/redemption of ETF units at the Intra-Day NAV on an ongoing basis.
Note: Until October 31, 2022, large investors may transact in multiples of creation unit size with the fund in the ETFs i.e. minimum criteria of Rs. 25 crores shall not apply.
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- On the Stock Exchange: Investors (including Market Makers and Large Investors): Units of the ETF may be subscribed for (in lots of one Unit) during trading hours on all trading days on the NSE and/or BSE, where the Units will be listed.
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HDFC NIFTY100 Low Volatility 30 ETF
An open-ended scheme replicating/tracking NIFTY100 Low Volatility 30 Index. The Scheme’s investment objective is to provide investment returns that, excluding expenses, correspond to the total returns of the securities as represented by the NIFTY100 Low Volatility 30 Index, subject to tracking errors.
Minimum Application Amount
- During NFO Period: Rs. 500 per application, then in multiples of Rs. 1 thereafter. The units will be allocated in whole numbers, and the remainder will be refunded. In the case of investors opting to switch into the Scheme from existing HDFC Mutual Fund Schemes (subject to completion of the Lock-in Period, if any) during the NFO Period, the application will be processed for the eligible amount and the excess amount will be refunded.
- On an Ongoing Basis:
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- Directly with the Fund – Market Makers/Large Investors: Only Market Makers (in Creation Unit Size) and Large Investors (with a Minimum application amount of Rs. 25 Crores and in multiples of Creation Unit Size) may approach the Fund directly for subscription/redemption of ETF units at the Intra-Day NAV on an ongoing basis.
Note: Until October 31, 2022, large investors may transact in multiples of creation unit size with the fund in the ETFs i.e. minimum criteria of Rs. 25 crores shall not apply.
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- On the Stock Exchange: Investors (including Market Makers and Large Investors): Units of the ETF may be subscribed for (in lots of one Unit) during trading hours on all trading days on the NSE and/or BSE, where the Units will be listed.
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ICICI Prudential Nifty Auto Index Fund
An open-ended index scheme replicating the Nifty Auto Index. The objective of the scheme is to invest in companies whose securities are included in the Nifty Auto Index and, subject to tracking errors, to attempt to achieve the returns of the aforementioned index. This would be achieved by investing in all the stocks comprising the Nifty Auto Index at the same weightage as they have in the index.
Minimum Application Amount
- During New Fund Offer Period/ During Ongoing Offer Period:
Rs. 1000/- (plus in multiples of Rs. 1)
The minimum application amount for switch-ins: Rs. 1000/- and any amount thereafter.
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Kotak Nifty SDL Plus AAA PSU Bond Jul 2028 60:40 Index Fund
An open-ended Target Maturity Index Fund investing in constituents of Nifty SDL Plus AAA PSU Bond Jul 2028 60:40 Index. The scheme’s investment objective is to track the Nifty SDL Plus AAA PSU Bond Jul 2028 60:40 Index through investments in SDLs and PSU Bonds maturing on or before Jul 2028, subject to tracking difference.
Minimum Application Amount
- Initial Purchase (Non-SIP)
Rs. 5000/- and in multiples of Re. 1 for purchases and of Re. 0.01 for switches
- Additional Purchase(Non-SIP)
Rs. 1000/- and in multiples of Re. 1 for purchases and of Re. 0.01 for switches
- SIP Purchase
Rs. 500/- (Subject to a minimum of 10 SIP instalments of Rs. 500/- each)
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Motilal Oswal Gold and Silver ETFs Fund of Funds
An open-ended fund of funds scheme investing in units of gold and silver exchange-traded funds. This scheme seeks to generate returns by investing in units of gold ETFs and silver ETFs. However, due to tracking errors of the underlying gold and silver ETFs, the scheme’s performance may differ from that of the underlying gold and silver ETFs.
The scheme consists of two plans:
- Regular Plan: Regular Plan is for Investors who purchase/subscribe to scheme units via any Distributor (AMFI Registered Distributor/ARN Holder).
- Direct Plan: Direct Plan is for investors who purchase/subscribe to units in a Scheme directly from the Fund, and is not routed through a distributor (AMFI Registered Distributor/ARN Holder).
Minimum Application Amount
- For Lumpsum: Rs. 500/- and in multiples of Re. 1/- thereafter.
- For Systematic Investment Plan (SIP):
| SIP Frequency Choice of Day/Date | Minimum Instalment | Amount Number of Instalments | Choice of Day/Date |
| Weekly | Rs. 500/- and multiple of Re. 1/- thereafter | Minimum – 12 Maximum – No Limit | Any day of the week from Monday to Friday |
| Fortnightly | Rs. 500/- and multiple of Re. 1/- thereafter | Minimum – 12 Maximum – No Limit | 1st -14th, 7th – 21st and 14th – 28th |
| Monthly | Rs. 500/- and multiple of Re. 1/- thereafter | Minimum – 12 Maximum – No Limit | Any day of the month except 29th, 30th or 31st |
| Quarterly | Rs. 1,500/- and multiple of Re. 1/- thereafter | Minimum – 4 Maximum – No Limit | Any day of the month for each quarter (i.e. January, April, July, October) except 29th, 30th or 31st |
| Annual | Rs. 6,000/- and multiple of Re. 1/- thereafter | Minimum – 1 Maximum – No Limit | Any day or date of his/her preference |
If the SIP date is not specified or if there is ambiguity, the SIP transaction will be processed on the 7th of every month in which the SIP registration application was received. If the SIP end date is not specified, the SIP will continue until the investor sends a termination notice. If the date specified falls on a holiday or non-business day, it will be implemented on the following business day. No postdated checks are acceptable for SIP.
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SBI CRISIL IBX Gilt Index – April 2029 Fund
An open-ended Target Maturity Index Fund investing in constituents of CRISIL IBX Gilt Index – April 2029 Index. The scheme’s investment objective is to provide returns that closely match the total returns of the underlying index’s underlying securities, subject to tracking error.
Minimum Application Amount
- Minimum Amount for purchase: – Rs. 5000 and in multiples of Re. 1/- thereof.
- Minimum Amount for additional purchase: – Rs. 1000 and in multiples of Re. 1/- thereof.
- Minimum Amount for redemption: – Rs. 500/- or 1 Unit or account balance whichever is lower
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Aditya Birla Sun Life CRISIL IBX Gilt – April 2026 Index Fund
An open-ended Target Maturity Index Fund tracking the CRISIL IBX Gilt Index – April 2026. The investment objective of the Scheme is to generate returns corresponding to the total returns of the securities as represented by the CRISIL IBX Gilt Index – April 2026 before expenses, subject to tracking errors.
Minimum Application Amount
- During New Fund Offer Period: Minimum of Rs.500/- and in multiples of Rs. 1/- thereafter during the New Fund Offer period.
- During Ongoing Offer period:
-
- Fresh Purchase (Incl. Switch-in): Minimum of Rs. 500/- and in multiples of Rs. 1/- thereafter
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- Additional Purchase (Incl. Switch-in): Minimum of Rs.500/- and in multiples of Rs.1/- thereafter
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- Repurchase for all plans/options: Minimum Rs. 100 and any amount thereafter.
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SBI CRISIL IBX SDL Index – September 2027
An open-ended Target Maturity Index Fund investing in constituents of CRISIL IBX SDL Index – September 2027 Index. The scheme’s investment objective is to provide returns that closely match the total returns of the underlying index’s underlying securities, subject to tracking error.
Minimum Application Amount
- Minimum Amount for purchase: – Rs. 5000 and in multiples of Re. 1/- thereof.
- Minimum Amount for additional purchase: – Rs. 1000 and in multiples of Re. 1/- thereof.
- Minimum Amount for redemption: – Rs. 500/- or 1 Unit or account balance whichever is lower
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Edelweiss CRISIL IBX 50:50 Gilt Plus SDL April 2037 Index Fund
An open-ended target maturity Index Fund investing in the constituents of CRISIL IBX 50:50 Gilt Plus SDL Index – April 2037. The scheme’s investment objective is to replicate the CRISIL IBX 50:50 Gilt Plus SDL Index – April 2037 by investing in Indian government bonds and SDLs with maturities on or before April 29, 2037, subject to tracking errors.
The scheme will provide two plans:
- Regular Plan
- Direct Plan
The Direct Plan will only be available to investors who purchase/subscribe to Scheme Units directly from the Fund and will not be available to investors who invest via a distributor. In the event that neither Distributor’s Code nor “Direct” is indicated on the application form, it will be treated as a “Direct Plan” application.
The scheme portfolio under both of these plans will be identical.
An (i) Growth Option and (ii) Income Distribution cum Capital Withdrawal (IDCW) Option will be available for each plan. IDCW Option shall have Reinvestment, Payout & Transfer Facility.
The AMC/Trustee reserves the right to introduce plans or options as deemed appropriate in the future.
Minimum Application Amount
- Minimum of Rs. 5,000/and multiples of Re. 1/thereafter.
(Disclaimer: Mutual funds are subject to market risks. There is no guarantee or assurance that the investment objective of any scheme will be achieved)
Frequently Asked Questions (FAQs)
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What are some of the important points to consider as an investor?
Things to consider as an investor
- Fund House Reputation: If an investor wishes to invest in an NFO, it is of the utmost importance to investigate the fund house’s background. Ensure the fund house has a solid track record in the mutual fund industry. It will assist you in evaluating the performance of the fund house during market ups and downs.
- Fund Objectives: The fund objectives specify asset allocation, riskiness, expected returns, and liquidity, among other things. An NFO must explain in detail the investment process it will use for the specified investment horizon. It means that reading the offer document should help prospective investors understand how the fund manager intends to use their money.
- Theme of New Fund Offer: In the Indian mutual fund industry, there are vast numbers of mutual fund schemes. When encountering an NFO, it is advisable to read the fine print carefully in order to comprehend the fund’s theme.
- Investment Horizon: Generally the lock-in periods for NFOs range from three to five years. In such circumstances, you will be required to remain invested for the duration of the term. Ensure your investments align with your investment time horizon and objectives.
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