What is an NFO (New Fund Offer)?

An NFO (New Fund Offer) is the launch of a brand-new mutual fund scheme. During the offer period you can buy units, usually at a flat ₹10 face value, before the fund opens for regular buying and selling.

The "₹10 is cheap" myth

An NFO at ₹10 is not a bargain compared to an existing fund at ₹450. Just like NAV, the starting price is irrelevant — what matters is the percentage return going forward. ₹10 buys you more units, but each unit grows by the same percentage.

Should you invest in an NFO?

• Usually no — an NFO has no track record. An existing fund with 5–10 years of proven performance is far easier to judge.
• Sometimes yes — if the NFO offers something genuinely new you can't already get (a new index, theme or asset class), a small allocation can make sense.

Be wary of NFOs pushed mainly because they're easy to sell during a market high.

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