Glossary· Costs & scheme terms
What is NFO?
Also known as New Fund Offer
A scheme's initial subscription window, before it starts trading.
Units are offered at ₹10, which is not a discount — it is an arbitrary starting NAV. An NFO has no track record, so nothing on this site can rate it; there is rarely a reason to prefer one over an existing fund with a decade of history.
For the formula and the constants behind this figure, see Methodology.
Guides that use NFO
5 guides put this term to work.
- What a mutual fund actually is (and why it is not a piggy bank)Who holds your money, who merely manages it, and why that separation is the whole safety architecture — plus what a NAV is, and what it is not.
- What is NAV — and does a low NAV mean a cheap fund?It is a division, not a price. The arithmetic that settles the ₹12 vs ₹847 question for good, the NFO trap it creates, and which day’s NAV you actually get.
- Sectoral and thematic funds: high risk, high reward — or just hype?The launch cycle is a coincident indicator of the peak, not a signal. Why concentration is the product, and the conditions under which one is defensible.
- Recency bias: why investors keep buying at the topThe industry's entire product cycle is built on it — themes launched after they run, tables ranked by past return, money arriving at the peak.
- Herd mentality: why buying what everyone else owns failsSocial proof works everywhere except markets, where the crowd's buying has already changed the price — and where crowding turns a decline into a liquidity event.
More on costs & scheme terms
What you pay, and the rules attached to buying and selling units.
- Expense ratio
- The fund's annual running cost, as a percentage of assets.
- Direct vs Regular plan
- The same portfolio, sold with or without distributor commission built in.
- Growth vs IDCW option
- Whether gains stay invested or get paid out.
- Exit load
- A fee charged when you redeem within a stated period.
- Lock-in
- A period in which units cannot be redeemed at all.
- Stamp duty
- A flat 0.005% government levy on every mutual fund purchase.
- Minimum SIP / lumpsum
- The smallest instalment and the smallest one-time amount the scheme accepts.