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| AMC/Company Name | Open Date | Close Date | Min Amount |
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1 Open a Jainam account
2 Select open NFO from the list
3 Confirm the details and invest
A New Fund Offering (NFO) is the initial subscription period of a new mutual fund introduced by an asset management company (AMC). It provides investors with an opportunity to buy units of the fund at the face value before it is listed and begins regular trading.
Assume an AMC launches a new equity mutual fund, and during the NFO phase, units are issued at ₹10 per unit. Investors who purchase at this phase can gain if the Net Asset Value (NAV) increases after the fund launch and invests in other securities.
Investing in an NFO is easy and involves the following steps:
If a subscriber invests in an NFO floated by XYZ Mutual Fund with ₹10,000 during the NFO period at ₹10 per unit, they would get an allotment of 1,000 units in the beginning. If the NAV goes up to ₹12 post-launch, the investment value will increase to ₹12,000, thereby resulting in a profit of ₹2,000 on the initial investment.
It is necessary to know NFO-related terms before investing:
To redeem an NFO (New Fund Offer), access your mutual fund account or demat account. Go to the redemption page, choose the NFO units you wish to redeem, and place a sell order. The money will be transferred to your linked bank account as per the exit rules of the fund.
An NFO (New Fund Offer) is the initial offering of a mutual fund, allowing investors to buy units at a fixed price before trading begins. A mutual fund (MF) is an ongoing investment where units are bought or sold at the net asset value (NAV), which fluctuates based on market movements.
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NFOs may be open-ended, i.e., one can continuously invest and redeem, or close-ended, i.e., with a pre-decided maturity date.
NAV (Net Asset Value) is calculated as Total Assets less Liabilities and then divided by the number of units issued once the NFO closure is done.
No, NFOs are not tax-free. Taxation depends on the holding period and fund type:
Investors can apply for an NFO through mutual fund websites, brokerage sites, or banking websites after KYC is fulfilled. Follow the link to apply for NFO at Jainam: Apply.
NFOs are profitable if they provide innovative investment approaches and efficient fund management but expose the investor to greater risk.
An NFO introduces a new mutual fund scheme, while an IPO (initial public offering) is when a company offers shares to the public.
NFOs are best for long-term investment, as their performance is unpredictable in the short term.
Consider the fund’s goal, asset allocation, expense ratio, and fund manager’s performance before investing.
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