The ₹38-trillion mutual fund (MF) industry is going through a new fund offer (NFO) rush. Since July 1, the industry has launched close to 70 NFOs, a report by Business Standard stated.
This is followed by the completion of a near three-month embargo period when the industry had vowed to not launch any new offerings till the time it implemented norms around the pooling of investor accounts. As a result, between April and June 2022, the industry was able to launch just three NFOs, informed BS. However, over the past two months, there has been, on average, one NFO hitting the market every day, it pointed out.
Quoting data from Value Research, BS noted that 37 NFOs were launched in July, another 26 in August and several are expected to get launched this month.
The report added that the NFO rush is expected to support the net flows into equity schemes, giving fund managers more dry powder to deploy in an event of a market downturn.
Under Sebi’s categorisation norms, a fund house can launch only one scheme in each of the product categories, informed the report, adding that over the past one year, several MFs have launched flexicap schemes, a new category allowed by the regulator. Many fund houses have also rolled out silver ETFs, another category allowed by Sebi this year.