After the recent Budget, fund houses have started a number of equity new fund offers (NFO) to boost market share and draw investors.
About New fund offers:
A new fund offer (NFO) refers to the initial sale of fund shares issued by an investment company to investors.
Similar to an IPO in the stock market, NFOs are intended to raise capital for the fund and attract investors.
Mutual funds are the most common type of new fund offering.
Types of New Fund Offers
Open-End Fund: These funds do not limit their number of shares. These funds can be bought and sold from a brokerage firm on their initial launch date and thereafter. The shares do not trade on an exchange and are managed by the fund company.
Closed-End Fund: Closed-end new fund offers are often some of the most highly marketed new fund issuances since closed-end funds only issue a specified number of shares during their new fund offer. Closed-end funds trade on an exchange with daily price quotes throughout the day.
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