Mutual funds have become a prominent investing option today, all thanks to the great returns that it offers to their investors and the less risk associated with them.
There are a variety of mutual funds available in the market today, but choosing the right one according to your personal goals is essential. While IPOs have taken over the financial market by storm, another famous option that has become more prominent today is NFO.
New Fund Offer is usually created for the purpose of raising funds for purchasing stocks and securities to expand and grow the fund. NFO is just like an IPO, which is why you can subscribe to it within a specific time.
The NFO price during the issue can be low, but it can increase after the issue expires. There are two kinds of NFO in the market today: Open-ended and close-ended, the former being more liquid and the latter having a fixed lock-in period.
Since the upcoming NFO in mutual fund is a completely new offer, there is a certain amount of risk involved in it, so carefully take the decision. Following are some of the benefits of investing in an NFO of mutual funds:
You can reap a huge amount of profits: For all those who don’t know, the entry price for an NFO is mere Rs. 10, which makes it a great option to buy and invest your money in.
After the subscribing offer expires, the net asset value per unit increases, leading to the reaping of high profits in the long run. You can either retain the investment or sell the units after you earn the profit, all of it depends on the financial goals you have in mind.
Get knowledge regarding new investment strategies: NFOs are an investment option in the modern world because they did not exist 20 years from now. They have their own unique qualities and benefits.
NFO mainly focuses on expanding the kind of options that are available in the mutual fund market by putting the collected money into adding new stocks. You can explore the various options that are available to you and choose the ones which you feel have the potential to help you grow wealthy.
Helps in creating a discipline of investing: The best part about NFOs is that they help you in becoming more disciplined in your investing journey. The NFO’s which come with a fixed lock period cannot be liquidated easily, which is why you need to make a habit of preserving and tracking them.
In the end, it will not only help you in developing a sense of discipline in the field of investing, but it will also help you in accumulating wealth over a long period of time.
Always keep in mind to use the best strategies and expertise to make the best mutual fund portfolio for yourself, so that you don’t face any complications in the future.