Up to 20 active & passive MF plans set to open soon

Mumbai: India was virtually padlocked for two consecutive summers to keep the virus out. As the shackles were broken this year, a host of industries have come alive with products to meet unmet demand. Much like the car industry that launched new models almost every week over the past few months, the mutual fund industry is reporting a flood of new fund offers (NFOs) this monsoon season. Up to 20 are lined up – both in the active and passive spaces.

A wide array of equity, hybrid, debt and thematic schemes are on offer. Financial planners believe investors should invest in NFOs only if they fit into their portfolio and not just buy it because units are available at ₹10.

On the equity side, there are NFOs of

Midcap Fund, Baroda Flexicap Fund and Quant Large cap fund.

Up to 20 Active & Passive MF Plans Set to Open SoonAgencies

On the hybrid side, there is the Mirae Balanced Advantage Fund, while in the debt space, there are gilt funds from Union Gilt Fund and UTI Gilt Fund with 10 year constant duration.

There is a sudden rush after a three-month wait as the regulator had barred mutual funds from launching NFOs. The industry complied with the regulator’s new rules including discontinuation of the practice of pooling client money for mutual fund transactions done on stock exchange and other online platforms.

Distributors point out that there is a high level of marketing and campaigns run to attract investors to NFOs. Wealth managers point out that while a NFO helps a fund house complete its product basket and offerings, and is valuable for them, many a time has little meaning for an investor.

“It is important for an investor to have products in his portfolio that help in meeting a goal or satisfying needs. If there is a missing product, compare if the NFO on offer has an edge over existing funds before buying it,” says Shital Shah, Founder, AG Financial Services.

Some distributors believe there is no real advantage for an NFO from an investors perspective. “An existing fund has a portfolio, past track record, well laid out philosophy which you can understand, see and take a decision, which are all missing in the NFO,” says Vijay Kuppa, Founder, Orowealth. Kuppa believes investors should have a maximum of 8-10 funds in the portfolio and be extremely choosy about adding a new fund and should wait for it to build a track record.

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