 "The cash held by equity mutual fund (MF) schemes went up sharply in July amid after-Budget volatility and concerns about elevated valuations. Strong inflows into new fund offerings (NFOs) also kept cash levels elevated.")
The recent market downturn has impacted mutual funds, especially recently launched equity new fund offers (NFOs). In recent years, fund houses have introduced several thematic and sector-focused schemes, attracting significant inflows. Many of these funds are now facing losses, with net asset values (NAVs) falling below the issue price.
“Nearly 90 per cent of the NFOs launched in the past two quarters fall into sectoral/thematic or passive index fund category. The impact of the recent sell-off has been seen across themes like defence and public sector undertakings (PSUs) that attracted major inflows before the broad market correction. Factor-based funds like
