Technologies
NFOs is a mutual fund, and they
offered when a new mutual fund launched and offered to the public before it
appears up to a daily transaction. For understanding better NFO’s can compare
with IOP’s (Initial Public Offering) as in the case of shares trading, Traders
buy the stock before it lists.
NFO’s actively managed funds,
i.e., where the fund manager applies his/her strategy for the market to beat
the market.
1.When a Mutual Fund scheme first
available for the investment it is called an NFO.
2.Investors have opportunities to
buy fund Unit at Face Value during NFO.
NFO Calendar - Upcoming offers: -
NFO issued in the month of July
2016. Invest in NFO and avail the opportunities.
|
S No.
|
Fund Name
|
Category
|
Time Frame
|
|
1.
|
HDFC
FMP 1161D July 2016 (1)
|
FMP
|
19/7/16
- 26/7/16
|
|
2.
|
UTI FTIF Series XXV – I
|
FMP
|
4/7/16 - 18/7/16
|
|
3.
|
Kotak
FMP Series 196
|
FMP
|
14/7/16
- 18/7/16
|
|
4
|
ICICI Pru. FMP- Series 79 -
1113 Days Plan G
|
FMP
|
14/7/16 - 19/7/16
|
|
5.
|
Reliance
Dual Advantage FTF - IX Plan E
|
CPOF
|
18/7/16
- 31/7/16
|
|
6.
|
UTI Dual Advantage FTF - Series
III – III
|
CPOF
|
13/7/16 - 27/7/16
|
|
7.
|
SBI
Dual Advantage Fund - Series XVI
|
CPOF
|
1/7/16
- 15/7/16
|
What is Open-ended fund ended
fund?
1.No fixed maturity
2.Entry or exit permitted at any
time, even after the NFO
3.Ongoing entry and exit imply
that Unit Capital changes
What is Close-ended Fund ended
fund?
1.Fixed maturity
2.Investors can buy units from
the fund only during NFO
3.Once NFO is closed, scheme gets
listed to allow transactions through the stock exchange
4.Listing is compulsory
Important points for New Fund
Offer: -
1. Units are offered to investors
for the first time through an NFO.
2. Three important dates are: -
A. NFO Open date – date from which investors can invest in the NFO
from which investors can invest in the NFO.
B. NFO Close date – Date to which investors can invest in the NFO
which investors can invest in the NFO.
C. Scheme Re-Opening date – applicable only to open-ended funds; date
from which investors can offer their units for re-purchase to the scheme
or buy new units; sale and repurchase prices are announced from Re-Opening
date.
3. Other than ELSS, NFOs can
remain open for a maximum of 15 days.
4. Allotment of units or refund
of money should be done within five business days of closure of NFO.
5. Open-ended schemes have to
re-open for sale/repurchase
within five business/working days
of the allotment.
Allocation of Units: -
1. During NFO-
No. of units = Invested Amount / Rs. Invested
Amount / Rs. 10
2. Ongoing Sales-
No. of units = Invested Amount / NAV (No Entry
Load)
Advantages of NFOs
i. Brings us new offerings that
are not currently available in the market.
ii. A close-ended fund where the
investor can’t redeem the amount whenever he wants instead, he needs to keep
that amount for the period of time as per NFO declaration.
Disadvantages of NFOs
i. NFO’s are new offerings so
difficult to analyze the future of the fund.
ii. Market charges and Initial
expenses are more in NFO.
iii. Less of diversification as
mostly NFO’s are sector specific
For any query, comment us below.
Keep learning and sharing...
Thank you it is really helpful. I want to know about closed ended fund and there return?
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