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2024 has been a year of NFOs. AMFI data shows that the MF industry has received net inflows of Rs. 1.18 lakh crore in 2024 compared to Rs.63,500 crore in 2023, a steep 86% increase in raising of money through NFOs.
The data shows that the industry has witnessed the launch of 226 NFOs in 2024 which is 35% more than the 168 NFOs in 2023.
Madhu Nair, CEO, Union Mutual Fund feels that NFOs and SIPs accounted for almost 95% of the total net inflow in 2024. He believes that only a handful of existing schemes have attracted significant inflows and investors are more interested in NFOs and SIPs.
Nair said that the exciting themes launched by the mutual fund houses, like defense and IT, have intrigued investors more than the existing schemes. He said, “Many large fund houses have exhausted all the categories of funds, which is why they are more focused on thematic funds.”
The Union MF CEO said that many investors are attracted towards thematic funds, and this is evident from the fact that 40% of the net inflows in the equity segment have come through thematic funds only in 2024.
Akhil Chaturvedi, CBO, Motilal Oswal MF, said that the industry has launched a host of NFOs focusing on growth themes and sectors. This has attracted many investors towards thematic funds.
Ravi Kumar Jha, MD & CEO, LIC Mutual Fund said that many investors have a misconception that they can buy MF units at Rs.10 through NFOs, which are cheaper than existing schemes.
Further, the newly launched NFOs are in line with the current prospects of the market trends, which is why they have been attracting investors, he said.
