The market continues to ride the bull and scale newer heights. Amidst the soaring market, NFOs have brought an adrenaline rush.
With the rising investors’ interests to participate in the ongoing rally, a few NFOs have clocked impressive numbers. In fact, there are NFOs which raised the bar by setting newer records. August 21 witnessed the launch of 15 NFOs which together mobilized Rs. 23,668 crore.
What could be the driving force behind the rising investor interest in NFOs?
Let’s hear what the industry players have to say.
Manish Mehta, National Head - Sales, Digital Business and Marketing, Kotak Mahindra Mutual Fund said, “New as well as existing investors who have stayed invested or who invested and did not panic in early 2020, have seen encouraging returns in their investment portfolios. NFOs launched in the past one year have given investors a good experience and we believe this is helping NFOs continue to witness rising interest.”
George Heber Joseph, CEO and CIO, ITI Mutual Fund said, "Generally when the market becomes exuberant, IPOs and NFOs are widely participated by individuals. FOMO (fear of missing out) is what is driving the NFOs and IPOs craze. Whenever the industry raises big money after a large run-up in markets, incremental returns made in the subsequent two years are significantly lower as against the previous two years. He further added, it is beneficial to approach the markets by way of STP or SIP at this juncture.
Anupam Guha, Head-Private Wealth and Equity Advisory Group, ICICI Securities feels that many first time investors have been investing in NFOs. “Millennials as well first time investors have been participating in India’s growth story through NFOs. Many NFOs have come out with newer opportunities and allow investors to widen their horizon through fund managers’ expertise.”
Satheesh Krishnamurthy, EVP & Head - Private, Premium Banking and Third Party Products, Axis Bank told Cafemutual that many existing investors want to explore newer opportunities like international markets through NFOs. He said, “Existing investors have increased their allocation to MF investments and we are also seeing several new investors participating owing to the rising financial awareness and the promising future of the Indian economy. The current trend is expected to continue as the penetration of MFs is still very low. As more investors participate, it will propel other investors to take part as well."
IFA Azeem Jagani and Suresh Sadagopan of Ladder7 Advisories attributed the current market performance to this rising traction. Investors are open to explore various equity-linked products in the current bull run. “Investor sentiments may undergo a change, whenever the next market correction takes place” concluded Azeem.
