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It’s Raining Passive, Global Funds, Should You Invest?

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The new fund proposal (NFO) The market is hot right now with more and more fund houses joining the race. Last time such a flush of NFOIt was witnessed in the years 2014-15. Currently, there are 14 NFOSea that are open for registration, and there are a few others in the doorway.

The stock market reached a new high of 60,000 points in September 2021, and apart from short leaps, the rise continues. Typically, investors are attracted to investing in stocks when markets are booming, and find Saturdays trying to make money from sentiment by flooding the market with NFOS. The same trend has been seen in the past.

The passive taste

Unlike in the past, this time the fund houses focus on index funds or exchange traded funds (ETFs), which have moved NFOs in other categories so far this year.

The reason why more index funds and ETFs were launched can be attributed to the ruling of the regulator on the capital market, the Securities Council of India (Sebi), in 2017. The ruling asked the fund houses to leave only one plan for the category. However, index funds, ETFs, thematic and sectoral funds have been removed from the area of ​​classification ruling and rationalization.

Of the current 14 are drawn NFOs, three are index funds, index funds of funds (FoFs) or ETFs. FoFs are funds that invest in other mutual funds.

Going global

Global Fund (FoF) is the next category that has seen the maximum launches so far this year after index funds and ETFs. With increasing awareness among investors, some are looking to diversify beyond geographic boundaries. This is why more and more global thematic funds of funds or ETFs are being launched, experts say.

Currently, there are four global funds NFOrunning. These are PGIM India Global Select Real Estate Securities Fund, Mirae Asset Hang Seng TECH ETF, Mirae Asset Hang Seng TECH ETF Fund of Fund, and Motilal Oswal MSCI EAFE Top 100 Select Index.

Is it worth investing in them?

Is it worth attending NFO Flood depends on what your personal financial goals are and what your overall investment portfolio looks like. If NFO Offering a product that is missing from your portfolio, you can invest in it. But you should not run after them simply because there is NFOs in the market. Remember that you can invest in these funds even after the NFO The period ends.

While entering NFOInvestors should primarily evaluate their investment portfolios and financial objectives to determine if a plan is appropriate. Once it is clear to you why you are buying NFO, Evaluate the past record of the fund house and fund manager before investing. You can also evaluate other similar programs that have already been established and have a good track record in terms of performance and management.

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