A recent AMFI data shows that the mutual funds industry has collected over 63,000 crore rupees through NFS launched during the financial year 2023. NFO or New Fund Offer denotes the purchase of initial public offerings launched by asset management companies ( AMCs) firms over a short period of time.
The maximum profits of MF come alone from 253 NFOs, according to the report. There are always uncertain records of investing in NFOs, yet when there is growth, investors can find reasonable amounts from NFOs. There are two types of NFOs – open-ended– refers to profit in the long-run by purchasing relevant assets, whereas closed-ended– refers to most heavily covered NFOs that can be purchased in different variations.
The NFO industry in 2022 faced a drawback of performance due to discontinuation of NFOs for 3 months and the average score of mutual funds. It collected an overall RS. 1.08 lakh collection for this performance.
Another factor that is responsible for this decline is the rise of interest rates in the country and worldwide. People were more engrossed in repayments of existing loans than investments. This industry, as a result witnessed a 40% decline in inflows in the primary 3 months of FY 2023. The highest collector of inflows were the SBI dividend Yield Funds amounting to 35000 crore. The next in the sequence is ICICI Prudential House Opportunities, which collected over 3130 crore funds.
Moreover, there were reasonable inflows from passive funds and index funds amounting to Rs. 10,000 crore and 6000 crores through NFOs respectively.
Therefore, it is always a matter of time & flexibility in the industry. Whether, you not spend in large investments and deal with the existing methods, or you can invest for a long-term and get a track-record of collection in a period of time.
