New Fund Offer - NFO

What is a New Fund Offer?

A New Fund Offer (NFO) is the first subscription Offering for any new fund offered by an investment company. NFO is launched in the Market to raise Capital from the public in order to buy securities like govt. Bonds, shares, etc. from the market. The initial purchasing offer for a new fund varies by the fund’s structuring.

NFO is similar to the initial public offer (IPO) with an attempt to raise capital from the market. New fund offers often have potential for significant gains after beginning to trade publicly.

NFOs are offered for a stipulated period, which means that the investors opting to invest in these schemes at the offer price can do so in this stipulated period only. After the NFO period, investors can take exposure in these funds only at the prevailing net asset value (NAV).

NFO is similar to an initial public offering. Both represent attempts to raise capital to further operations. NFO can be accompanied by aggressive marketing campaigns, created to entice investors to purchase units in the fund.