Types of New Fund Offer
1. Open-Ended NFOs: These NFOs do not have a fixed maturity date and allow investors to buy and sell units at any time after the NFO period. Open-ended NFOs continuously issue and redeem units based on investor demand.
2. Closed-Ended NFOs: Closed-ended NFOs have a fixed maturity date, typically ranging from a few years to several years. Investors can subscribe to units only during the NFO period, and after that, the scheme is closed to new investments. Units of closed-ended NFOs are typically listed on stock exchanges for trading after the NFO period.
3. Fixed-Price NFOs: In fixed-price NFOs, units are offered to investors at a predetermined price, usually fixed throughout the NFO period. Investors subscribe to units at this fixed price, and the units are allotted based on the subscription amount.
4. Fixed-Duration NFOs: Fixed-duration NFOs have a specified duration during which investors can subscribe to units. However, the price of units may vary based on demand, and investors may receive units at different prices depending on when they subscribe during the NFO period.
5. Thematic or Sector-Specific NFOs: These NFOs invest in specific themes, sectors, or industries, aiming to capitalize on emerging trends or opportunities within those areas. Thematic or sector-specific NFOs allow investors to gain exposure to niche segments of the market.
6. Index Funds or ETF NFOs: Some NFOs launch index funds or exchange-traded funds (ETFs) that track specific market indices, such as the Nifty 50 or S&P 500. These funds aim to replicate the performance of the underlying index and provide investors with diversified exposure to a broad market or specific sector.