What is a Better Investment, NFO or Existing Funds?
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Anytime is a good time to invest. When it comes to investing in mutual funds, investors often face a dilemma: Should they invest in New Fund Offers (NFOs) or stick with existing mutual funds? Understanding the differences and potential benefits of each option can help you make a more informed decision.
An NFO is the initial public offering of a new mutual fund scheme, similar to an Initial Public Offering (IPO) in the stock market. Investors can subscribe to the mutual fund units at a nominal price, typically ₹10 per unit. Once the NFO period is over, the mutual fund units are available for purchase at their Net Asset Value (NAV).
On the other hand, Existing Funds have been around for a long time and have a significantly longer history, providing a track record. For existing funds, the investor can review whether the fund has consistently produced good results or not and can buy units of these funds based on the current NAV.