The Indian mutual funds industry is riding high on the back of a buoyant equity market. Investors’ bullishness for the equity market is visible through the growing number of mutual fund systematic investment plans (SIPs) and the flurry of new fund offers (NFOs).
SIPs recorded a monthly inflow of close to ₹10,000 crore in August 2021, according to data from the Association of Mutual Funds in India (Amfi), while in September alone, at least three NFOs were launched—Kotak MultiCap Fund, Mirae Asset S&P 500 Top 50 ETF and HDFC Developed World Indexes Fund of Funds. The industry mopped up ₹60,000 crore through 84 NFOs launched between January and August 2021, according to Amfi.
Clearly, more and more investors are buying into NFOs. But does it really make sense to buy into every NFO that comes out in the market? Let’s explore.
Is an NAV of ₹10 a Big Deal?
Usually, it’s the small ticket size of the NFO units that allures investors. The net asset value (NAV) for most NFOs is as low as ₹10 per unit. But it may simply be a marketing gimmick.
Industry experts believe that the equity market euphoria is playing a vital role in new scheme launches, but are also worried about the way they are being marketed.
“The fundamental purpose of any NFO is to gather assets and fund houses would exploit the market buoyancy by creating buzz around the ‘new fund launch’ with a low ₹10 NAV,” says Swarup Mohanty, chief executive officer (CEO) of Mirae Mutual Fund.
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Gold ETFs And FoFs
While Indians love to invest in physical gold, even mutual funds offer the option, but in paper format.
PLANNING TO BUY CHILD INSURANCE? THINK TWICE
Child insurance plans combine insurance and investment but often offer low returns due to high costs, making a combination of a term insurance cover and mutual fund a better option for securing your child’s higher education needs
How Do You Define Happiness?
Money does buy happiness, but after a while, the appeal fades. We talk about our relationship with money, but, maybe, it’s time to revisit our relationship with happiness
Avoid Crypto As It Is Highly Volatile
I am 22 years old and have recently started working. I want to invest a small portion of money in cryptocurrency. How should I go about it? Does it require a huge capital investment?
Invest Right, Don't Speculate
The lure of high returns and quick gains from equity tips, cryptocurencies, and equity F&O can be enticing. But remember, return of capital is more important than return on capital
The Wedding & Budget: Is Minimalist Trend The Right Knot For You?
Indian weddings are known for their pomp and grandeur, but minimalist weddings are also in vogue now. Dia Mirza was one such celebrity who went for a minimalist wedding. If you also want to keep things minimal on your big day, here’s how to do it
Here's How To Buy An ETF?
Mutual funds are the preferred choice for retail investors. However, they come at a cost and fund management risk, apart from other risks. A smarter alternative is to invest through ETFs.
How Passive Funds Help Diversify
Passive funds provide a simple way to invest in broad markets as well as in specific themes and sectors, making them ideal for an investor's satellite portfolio
The Rise Of Passive Funds
The popularity of passive funds among retail investors has risen post Covid, and fund houses are out with many variations of ETFs and index funds. Does this category present a new opportunity for investors?
Tax Reforms: What's In Store?
The government is working on reforming the existing Income-tax Act, 1961. The impending reforms have raised many questions in the minds of taxpayers. Will the old regime and deductions be done away with? Will it really simplify your life? What's the need for these reforms? We try to answer these and other questions regarding tax reforms