15 NFOs lined up while the market is on a downswing. Should you invest now?

 With the stock market undergoing a correction mode with 10 percent fall behind it, investors are not radiating too much enthusiasm about the valuation of stocks and mutual funds. Notwithstanding all this, a number of mutual fund houses have rolled out a large number of new fund offers (NFOs) for the next few days and weeks.

Among these new fund offers, there is one healthcare fund, a realty index fund, an auto index fund, one IT sector fund and one transportation fund.

Some of the new themes include Momentum Fund by Axis, Business Cycle fund by DSP, equity minimum variance fund by ICICI Prudential, active momentum fund by Union and select business groups fund by Tata. 

There are a few sectoral/ thematic funds as well. For instance, healthcare funds by PGIM, auto index and realty index funds by Nippon India. Some fund houses also launched hybrid funds such as Groww Multicap fund and Invesco India Multi Asset Allocation Fund.

Notably, this calendar year (2024) has already witnessed a significant increase in stock market listing with 302 companies getting listed, driven by high retail investor participation. The key IPOs include Hyundai and Swiggy, whereas SME offerings attracted significant attention.

Should you invest now?

Since these schemes will buy stocks at current valuations which are witnessing quite volatility, is this advisable to invest at this stage now? Experts believe that despite benchmark indices (Nifty50 and BSE Sensex) on a downswing, investors may still enter at these valuations if they have a long term view of the market, say three years.

“We feel that this (Bank of India Consumption Fund) is ideal for investors looking for broad thematic exposure across an equity portfolio with a time horizon of three years and above,” says Mohit Bhatia, CEO of Bank of India Mutual Fund, which launched a consumption fund and will be open for subscription on Nov 29.

“A lot of new fund offers (NFOs) are coming with the new concepts such as momentum and innovative funds. The inflow is good but amid correction, I wouldn’t recommend investing into thematic funds but one can still explore thematic funds,” says Sridharan S., Founder of Wealth Ladder Direct.

While commenting about Groww multi cap fund, Varun Gupta, CEO of Groww Mutual Fund, said: “India’s growth story is unparalleled in scale and diversity, presenting opportunities across sectors and market capitalisations. This new fund aims to provide investors with a structured way to participate in this transformative journey.”