The stock market continues to experience a downturn, with the volatility that began in 2024 showing no signs of abating. Nevertheless, mutual fund investors remain steadfast in their confidence, consistently putting their money into mutual funds. In fact, they are also making significant investments in new mutual fund schemes.
In 2024, mutual fund companies launched 239 New Fund Offerings (NFOs), attracting a remarkable investment of Rs 1.18 lakh crore. Among these, sector and thematic funds were particularly favored by investors. This information was highlighted in a report by Germinate Investor Services Research released on Monday.
This upward trend showcases the increasing confidence among investors.
According to the Germinate Investor Services Research report, asset management companies (AMCs) managing mutual fund schemes successfully raised Rs 1.18 lakh crore through 239 NFOs in 2024. In comparison, Rs 63,854 crore was raised from 212 NFOs in 2023, and Rs 62,187 crore from 228 NFOs in 2022.
In 2020, a year heavily impacted by the Covid-19 pandemic, Asset Management Companies (AMCs) successfully raised Rs 53,703 crore through 81 new fund offerings. This surge in new fund offerings (NFOs) indicates a robust growth trajectory and a rise in investor confidence. Typically, NFOs are introduced during bullish market conditions when investor sentiment is optimistic and high.
This is why they have gained popularity among investors. NFOs were launched to capitalize on this positive investor sentiment and draw in more investments. Industry experts noted that the favorable performance of the stock market, along with positive investor attitudes, led to an increase in funds raised through NFOs in 2024.
The report highlights that sector-specific or theme-based funds, index funds, and exchange-traded funds (ETFs) attracted significant interest from investors last year. It states that during this time, 53 NFOs raised Rs 79,109 crore, making these funds the preferred choice for many investors. Equity funds designed for specific sectors or themes gained traction due to their targeted approach and alignment with market trends.
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