NFOs to invest in March: Navi Nifty IT Index Fund, AXIS Nifty Midcap 50 Index Fund

An Initial Public Offering (IPO) lets a company sell its shares at a base price to interested shareholders. The New Fund Offer (NFO) allows asset management companies to launch new funds. It is available at a base price to investors. When an NFO is launched, investors can subscribe to the scheme in the specified window. Let us look at some of the NFOs that are currently open for subscription.

A List of NFOs to Invest in March

A company launches its IPO to sell its share to interested shareholders at the base price. Similarly, an asset management company launches a new fund through New Fund Offer (NFO). Interested investors can invest in it at the base price.

If you subscribe to the NFO during the initial window, you get the NFO at an offer price, which is usually fixed at Rs 10. Once the tenure expires, after a few days, the fund reopens for other investors to make investments.

In some cases, an NFO can be cheaper compared to existing funds in the same category as they are new to the market. However, it is recommended that investors take their investment-related decisions only after analysing the whole scenario  and putting in their judgment and wisdom. 

Related: Understanding NFOs: 5 Things You Must Know About Investment Instrument Listicle

Let us look at some of the NFOs that are currently open for subscription:

  • Navi Nifty IT Index Fund (G) - For investors looking to invest in the IT sector through a low-cost index fund, they can consider this new NFO by Navi. The ETF is going to invest in the stocks of companies comprising the Nifty IT Index, subject to tracking error. There will be no entry or exit fee for the NFO and you can make a minimum investment of Rs 500 to get started with the NFO. It is open for subscription between 3 and 14 March.
  • Motilal Oswal S&P BSE Low Volatility ETF - This NFO is a good option for conservative investors who don't want to see their investment swing up and down when the market is tumultuous. It is going to track the returns of the securities as represented by the S&P BSE Low Volatility Total Return Index. The index included some of the biggest and safest companies in it: TCS, INFY, MARUTI, HDFC BANK, and many more. There is no entrance or exit fee on the NFO, and you can invest as little as Rs 500. It will be available for subscription between 4 and 16 March.
  • Navi NASDAQ 100 Fund of Fund - It is an open-ended equity scheme that is going to invest in a unit of overseas index funds and ETFs based on the NASDAQ100 index. For the direct plan, the fund will have an expense ratio of 0.13 percent, which the fund house claims as the lowest in the industry. The NASDAQ100 is a technology-driven index that includes some of the world's most well-known corporations. This NFO may be of interest to investors seeking foreign exposure. The NFO is accessible for subscription between 3 and 17 March, with a minimum investment of Rs 500.
  • AXIS Nifty Midcap 50 Index Fund - It is going to invest in the 50 most liquid midcap stocks, giving preference for stocks where F&O contracts are traded on the NSE. Although there is no entry fee, there is an exit fee of 0.25% if redeemed/switched out within 7 days from the date of allotment. The minimum investment amount is Rs 5,000, and it will open for subscription on 10 March and will close on 20 March.

Related: New Fund Offer (NFO) All You Need To Know About This First-Time Subscription Offer For A New Scheme

Ending Note

To conclude, we would like to highlight that investing in an NFO could be risky. With existing mutual funds, you have a lot of data to check the performance. You can check the past performance of the fund and compare it with its peers to invest in the best one. You cannot do the same with an NFO.

One should still consider NFO, understand them, and evaluate if it meets their requirements. If they fall in line with your requirement, you can subscribe with a small amount and grow investment in the scheme once the performance data start showing up.

Related: Got Questions About New Fund Offer (NFO)? Here Are The Answers


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