NFO MUTUAL FUND SCHEMES
OPEN AND CLOSE-ENDED NEW FUND OFFER SCHEMES
AMCs offer new NFO mutual fund schemes as open-ended and close-ended schemes. Open-ended NFO is a perpetual kind of fund. Thus, once the new mutual fund is launched it continues to exist without an end date. However, closed-ended NFO funds are open for subscription for a limited time frame and come with a fixed duration such as 3 years, 5 years, and 7 years. Investors can buy open-ended funds anytime from the fund house. The close ended funds are generally listed and the entry exit can be done thru exchange platform.
You can invest even after the closure of the new fund offer. However, you can invest in a close-ended fund only during the offer period. Once the offer period elapses, you cannot invest into close-ended funds but you can buy from the exchange if Listed. Open-ended funds are generally considered more investor friendly as they offer anytime investment and redemption compared with close-ended funds. NFO investment has become an online investment option for many investors largely because its Net Asset Value (NAV) is priced at Rs. 10 per unit, compared with other open-ended schemes that have a higher NAV.
Disclaimer : *investment in securities market is subject to market risks, read all the related documents carefully before investing.