Asset mobilisation through the new fund offer (NFO) route has hit a nine-year high in 2017. The mutual fund (MF) industry launched a total of 47 NFOs during the first 10 months of the year, to mop up a cumulative Rs 13,500 crore. The average NFO size, too, has increased to a nine-year high of Rs 288 crore. The amount raised this year is still a fraction of what it used to be during the bull run of 2005-08.
The annual mop-up during those four years was an average Rs 28,000 crore. Industry players say, currently, investors prefer existing funds with a reasonable performance track record over new scheme launches. It is quite evident, as equity schemes got inflows of Rs 1.16 lakh crore so far in 2017, of which equity NFOs contributed a mere 12 per cent. Industry officials expect the trend of more money flowing into existing schemes will continue. Fund houses that don’t have existing schemes in any of the product categories will only launch NFOs, they say.