New Fund offer
When units of a Mutual Fund scheme are offered to the public for the first time it is referred as NFO – New fund Offer. It is offered to the public through an offer document which is the most important source of information. It gives information about the type of scheme, investment objectives, investment pattern, fee and expenses, liquidity provisions etc.
The NFO opens on a particular date starting which you can invest and it closes on a particular date up to which you can buy the units. Generally the NFO remains open for a maximum period of 15 days. You will get your units allotted with in 5 business days after the closure.
In a case where the scheme is open ended, the scheme is re opened on a scheme reopening date after which you can sell or repurchase the units of the mutual fund.
What makes NFO attractive ?
What are the shortcomings of NFO ?
When should you choose NFO ?
You should choose to buy units through NFO when you are sure of the investment objective of the fund and your investment horizon matches with that of the NFO.