Should I invest in NFO?

Question

Hi! I read an article (This article = http://wealth.moneycontrol.com/authorarticle.php?id=3811 )

Its abt NFO... I am curious whether investin in NFO is safe and secure... at the moment i have some long term investment in terms of equity holding.

Pls advice...

Answer 1

View It Now: http://www.stockEXE.com

Answer 2

If you are investing in the NFO of a Equity based fund, then investments should be done by being aware of the risks involved in the stock market.  The Offer document of the fund will clearly mention the risk factors involved for the investments in the fund.

For long term holding this is the right time to invest in equity funds, as the markets have crashed in the past and become  cheaper now.

Answer 3

in my opinion nowis the right time to invest in mf if u are a long term investor. But u should not invest in ANY NFO. it depends on the MF company. we have to see their track record, theie performace of the various MF schemes they are running/managing at present. can give u axact advise if u mention the name of the company offering NFO. it is quite difficult to give good advise to a general question. specifics have to be there to asses the pros and cons and then advise on it,

Answer 4

The short answer is NO.

The longer answer/justification is as below:

Investors often tend to think of fund NFOs in the same vein as they do of stock IPOs. However, there are some fundamental differences that they need to take into consideration. The price of a stock is based on its supply and demand. IPOs often get listed at a premium because when a stock opens, its demand is sometimes much larger than its supply. This is not true for mutual funds, where a separate unit is created at the time of investment, which is destroyed at the time of redemption. Thus, the supply of mutual fund units is unlimited and so any appreciation in the value of a fund's NAV can never be due to an increase in the demand for a fund's units. Moreover, in case of funds, your gains depend on how well the fund manager invests.

All things considered, it is generally a good idea to stay out of fund NFOs. A new fund is an untested entity without any track record. Your investment call will have to be made purely by looking at the fund manager and the AMC. Another issue is that of a possible opportunity loss. Your investments may be locked in for up to a month. This money could instead be kept in a liquid fund for a month and then invested once the fund opens for daily sale and repurchase post its NFO.

There are some exceptions to this. An obvious one is closed-end funds. Even though these are no longer in vogue, there are special funds called fixed maturity plans, which are similarly structured. If you want to invest in one of these, then the NFO may be the only option available.

You need to understand that fund NFOs are purely a marketing device that creates some excitement. AMCs always communicate strongly during an NFO. A discerning investor should absorb this information carefully and invest later when the fund opens for sale and repurchase on an ongoing basis, thru careful observation of its track record.

Answer 5

NO WAY! The graph is disgusting do not buy this stock is free falling it is a free falling lol....

Answer 6

My advice is no.  You have no performance data on which to base a decision on whether the new fund offering (nfo) will have decent management or not. It might and it might not.  But if you invest in a fund with a track record, at least you have some basis for making an informed decision.  Although past performance certainly is no guarantee of future performance, it is the only basis one has for making a decision.  Safe and secure?  No investment is safe and secure.

Answer 7

Do you mean Claymore/Sabrient Insider (NFO)? wait and see