All you need to know about NFO.

What is NFO?

The NFO or New Fund Offering is when capital is open for initial investments from investors for the new Mutual Fund Scheme. NFO is launched by the Asset Management Company (AMC) for a new scheme subscription. There is a certain period within which we need to make a NFO investment. The period differs from 3 to 15 days.From the capital which is raised through NFO, the fund manager who manages that particular fund will invest to create a new mutual fund. The details of the portfolio of mutual funds will be mentioned before launching an NFO. Investors must research and learn the details regarding NFO. The fund manager’s responsibility is to strategically build a portfolio and manage the funds raised so that it gives a good return to the investors.

How does NFO work?

Whenever the New Mutual fund is to be created. The asset management company (AMC) comes with NFO. Through NFO, AMC will make an initial investment in the Mutual fund scheme. After a certain period, NFO becomes a Mutual Fund. Open to the public for any time to invest. NFO’s value will be fixed, whereas after the New Fund Offering period, the value of the Mutual Fund changes, which is called the Net Asset Value (NAV). As the new sector emerges, or the innovative strategy for asset management keeps coming, there could be a possibility of more NFO releases. Example:- There is an algorithmically based stock portfolio selection, Set of Mutual Fund portfolios for the innovative business sector.

What are the Benefits of Investing in NFO?

  • Profit through an increase in value: NFO price is fixed and small. After a certain period when the value increases. While redeeming, there is the possibility to get huge profits through investing in NFO.
  • Discipline: Any investment gives a good return when invested in growth stocks for a long period, Usually more than 2 years. When investing in NFO there is a lock-in period before which the investments can’t be redeemed. This is beneficial to make long-term safe investments for children’s higher education/ marriage or to spend when you grow old.
  • Arrival of new funds: With the arrival of new companies and new methods of finding value stocks. New mutual fund schemes such as recently IPO listed stocks and present them for NFO before every investor gets in.

How to invest in NFO?

Generally, You can find Asset Management companies advertising about the arrival of the new NFO in newspapers, the internet, and so on. You will be able to find them on mutual fund investment platforms. If you are already registered with the AMC, you will get mail from them. Now, it’s time to learn about the new NFO, what technology they use, What is its innovation, What stocks are in the portfolio. This helps to make a more rational and data-driven decision-making. If you want to subscribe to an NFO, Sign in to any trading platforms like Zerodha, Groww, etc. Complete your KYC. KYC is getting information regarding things like your Aadhar and PAN card. Pay the minimum subscription amount or more than that based on your interest, and now you invested in NFO.


Since NFO is new, we will not have a historical track record to evaluate the NFO. The investor must read the documentation shared by AMC. A mutual fund manager is going to manage the NFO. It’s good to research the past investments managed by the asset manager and then decide. Before making an investment, investors should ask if their investment goals go with NFO. If you want safer investments, the only way is research about that NFO before investing.