Queries

Investment Through NFO Carries More Risk Than SIPs Lalit Jha What is the benefit of investing in mutual funds through new fund offerings (NFOs)? Do they provide any advantage over systematic investment plans (SIPs)? When you are investing in a mutual fund through an NFO, it is important to be aware about the risks, as there is no history of past performance, unlike in the case of existing mutual funds. That makes them extremely risky, because they might perform or absolutely fail. There is no comparison between opening an SIP in existing mutual fund and investing through an NFO. Here are some points you should keep in mind before investing in NFOs. Check if it’s open-ended or closed-end. Check if it has any lock-in period or not. Check the type of securities the mutual fund will purchase through this NFO. What is the objective of the fund? Expenses will be deducted from the net...