Introducing DSP Global Innovation Fund of Fund, an NFO which is beyond bank-tastic. It is made for beginners wanting to participate in innovation worldwide, the fund has a good mix of dominators, disruptors and enablers that are reimagining the world as we know it. Before we dive into the details of this fund, let’s find out more about NFO and its benefits.
What is an NFO?
NFO stands for New Fund Offer, a mutual fund launched by an asset management company (AMC) for the first time. AMCs usually launch NFOs to attract new investors and raise capital. In other words, an NFO is a new mutual fund scheme that did not exist before.
Different types of NFOs
There are three types of NFO mutual funds: open-ended, close-ended, and exchange-traded funds (ETFs). Let's take a closer look at each of these.
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Open-Ended NFOs
These are mutual fund schemes with no fixed maturity date. Investors can buy or sell units at any time at the scheme's prevailing net asset value (NAV). Open-ended NFOs are ideal for investors who want flexibility and liquidity.
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Close-Ended NFOs
These mutual fund schemes have a fixed maturity date. Here, investors can buy or sell units only during the initial offer period. These NFOs are ideal for investors who want to invest for a specific period and are not concerned about liquidity.
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Exchange-Traded Funds (ETFs)
These mutual fund schemes are listed on the stock exchange and trade like stocks. ETFs are open-ended funds that invest in a basket of securities and are designed to track the performance of a specific index or commodity. ETFs are ideal for investors who want to invest in a diversified portfolio at a low cost.
Are NFOs a good opportunity?
NFO mutual funds can be a good investment opportunity for investors looking for a new and unique investment option. However, investors should be aware that NFOs are launched by AMCs to raise capital. There is no guarantee of returns. Moreover, NFOs often have a specific investment theme. So, investors should evaluate whether the theme aligns with their investment objectives and risk profile.
Benefits of investing in NFOs
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Potential for higher returns
A key benefit of investing in the latest NFO mutual fund is the potential for higher returns compared to established mutual funds.
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Unique investment opportunity
NFOs offer a unique opportunity to invest in a specific market or asset class.
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Diversification
Investing in NFOs can provide diversification benefits to your investment portfolio. NFOs may offer exposure to different sectors, geographies, or asset classes, which may not be available in traditional mutual funds.
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Flexibility
NFOs offer flexibility in terms of the investment amount and lock-in period. This means investors can invest according to their financial goals and requirements.
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Fixed-price subscription
One of the unique features of NFOs is that investors can subscribe to units at a fixed price during the NFO period. This means that investors can benefit from the lower cost of the teams during the initial offering.
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Professional fund management
NFOs are managed by skilled fund managers with expertise in the market or asset class that the NFO targets. This means that investors can benefit from the knowledge and expertise of these professionals.
DSP Global Innovation Fund of Fund Details
It gives you exposure to cutting-edge next-gen themes like semiconductors, pharmaceuticals, autonomous driving, blockchain, artificial intelligence, robotics, cloud infrastructure, social media, software and more.
It has a fine balance of active and passive fund strategy with a suitable allocation to large, mid and small-cap companies. It has a low correlation with the Indian equity market that may act as a sound portfolio diversification strategy for you. Click to find the details of DSP Global Innovation fund: https://upstox.com/mutual-funds/dsp-global-innovation-fund-of-fund-direct-growth-details-104162
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