Latest NFO Mutual Funds in January 2023

What is NFO

New Fund Offers or NFOs refer to the creation of new mutual funds where people can invest. This means that an existing mutual fund house is launching that fund for the first time in the market. 

Fund managers of NFO mutual funds gather the investment pool from investors and in turn invest in various return generating assets, including stocks and debt. Those who invest in stocks are known as equity funds and those which invest by offering debt instruments (e.g. investing money by buying government bonds) are known as debt funds. 

In case of closed ended funds, once the investments are done, the fund will then focus on managing returns rather than gathering investments. Therefore, the period during the launch of an NFO mutual fund is extremely important in such cases.

Investment experts are favouring debt funds at the moment because they believe that the Indian economy, with the increases in interest rates, is reaching the end of an interest rate cycle, whereby the interest rates are going to recover soon.

Emerging Trends in NFOs

Of the 12 new funds being launched in January 2023, only 4 are equity-based or hybrid funds. The remaining  are all debt funds, mostly passive. Debt funds are considered to be less risky as the rate of interest or in other words, the rate of return, is something that they are legally entitled to. Moreover, if they are investing in government bonds of financially stable countries such as India, then the risk of default of loans is negligible.

List of new NFOs in January 2023

The following are the new NFO mutual funds that are getting launched in January 2023 –

*TMF = Target Maturity Funds i.e. open-ended funds with a fixed maturity date (can be bought or sold anytime)

*FMP = Fixed Maturity Plans i.e. closed-ended funds with a fixed maturity date (can be bought only when launched and sold only when the fund is matured)

Among the larger fund houses, the Tata and the Aditya Birla Sun Life mutual funds are coming up with hybrid and equity schemes in the second week of January. In the same period, Tata and HSBC mutual funds are coming up with multicap funds as well.

Things to look out for

New funds definitely generate a lot of interest, especially if it is coming from an established fund managing house. However, it is important to know about the funds offered, their details and the situation overall in the market before investing in any of them. 

In fact, several investors prefer to invest in funds that already have an existing track record of a few years. This is because it shows that the portfolio has been able to withstand changing financial trends over the years and the managers have a fair amount of expertise in overcoming hurdles.

Way forward

Now that you know about several upcoming NFO in mutual funds, you may want to compare them against each other and even invest in one or two of them. If this is the first time you are investing, try to open demat account today and invest in your favourite fund with Angel One, India’s trusted stockbroker.

Disclaimer: This blog is written exclusively for educational purposes. The securities quoted are only examples and not recommendations.