Mutual Fund collection via new fund offering surges to ₹22,000 crore in July-Sep quarter: Report

Mutual fund raising through new fund offerings (NFOs) has increased. 22,000 crore in the July-September quarter after 48 new schemes were launched in the market, which is almost four times the previous quarter, according to a report by news agency PTI.

In the coming quarters, the issuance of NFOs (New Fund Offerings) will increase as multiple Asset Management Companies (AMCs) commence operations, presenting both equity and debt investors with both comparable and distinct financial products to be hope, Gopal Kavalireddi, Vice President. Research by FYERS, PTI quoted him.

“With investors firmly believing in India’s growth story and the emergence of new segments in the organized space, more and more companies are seeking funds through primary and secondary market offerings. To support these listed firms, would AMCs are interested in launching more schemes across equity and hybrid categories, especially in the mid-cap, small-cap and micro-cap markets,” he said.

According to a report by MorningStar India, in the quarter ending September 2023 48 new schemes were launched, which were able to garner over 22,049 crore at the NFO period, compared to 25 schemes launched earlier in June quarter garnering over 5,539 crore during their NFO period.

Typically, NFOs are launched amid a booming market characterized by heightened investor confidence and optimism. These NFOs are brought in to leverage the positive sentiment among investors, attracting them to invest during this opportune period when they are most eager to commit their funds.

Feroze Azeez, Deputy CEO of Anand Rathi Wealth stated that this huge inflow in NFOs is mainly due to the overall attitude towards equity.

He also said that the monthly flow for Systematic Investment Plans (SIPs) has increased. 16,900. The cumulative inflow into mutual funds since the beginning of the year has been reached 80,000 crore, indicating a growing trend towards equity. This momentum is also fueling New Fund Offerings (NFOs) with significant inflows.

In addition, NFOs are expected to continue in the thematic, sectoral and passive categories, Azeez added.

ICICI Pru Innovation Fund, Baroda BNP Paribas Value, Bajaj Finserv Flexi Cap, HDFC Defense Fund, and HSBC Consumer Fund were the top performing schemes in terms of accumulation of highest Assets Under Management (AUM) during the quarter.

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Updated: 19 November 2023, 11:40 AM IST

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