NFOs likely to see lower flows over weak investor sentiment, lockdown

In March, collections had declined close to 50% from previous month

The new fund offerings (NFOs) floated by mutual funds (MFs) to fill in product gaps, or offer focused exposure to an investment theme, are likely to see limited collections due to weak investor sentiment and disruption of offline channels amid the nationwide-lockdown.

NFO collections in March -- when the lockdown was put in place to deal with the coronavirus (Covid-19) pandemic -- dipped to Rs 1,310 crore; 48 per cent lower than previous month.

“Fresh allocations from investors to new funds can be challenging, given the weak investor sentiment as several investors are considering stopping existing allocations due to prevailing market volatility,”