NFOs open for subscription in the current week

New fund offerings (NFOs) offer the perfect opportunity to the investor to invest in a new idea in the mutual fund space. Experts often argue that there is no value in investing in an NFO as the face value of Rs10 could be misleading. Even while appreciating the wisdom of such pronouncements, it must be said that NFOs bring in fresh supply of investors and funds into the market. To that extent they are almost akin to IPOs. Here we look at 3 new fund offerings (NFOs) that are current open in the mutual fund market for subscription.

NJ ELSS Tax Saver Scheme

The NJ ELSS Tax Saver Scheme comes from the house of NJ Financial. Based out of Surat in Gujarat, NJ has emerged as one of the most promising and powerful players in the distribution of mutual funds. Their NFO for an ELSS scheme is open right now and will continue to be open well into June. Here are some of the highlights of the scheme.

• The basic investment objective of the Scheme is to generate income as well as long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related instruments.
   

• It will be an open ended scheme once the NFO and normal buying and selling at NAV linked prices start. It is classified under the category of Equity Scheme – ELSS.
   

• The NFO or the new fund launch opened for subscription on 13th Mar 2023 and shall remain open till, at least, 09th June 2023.
   

• Being a tax saving scheme, the minimum investment would be Rs500/- and in multiples of Rs500/- thereof. Investors can opt to invest in the fund through the SIP route or through the lumpsum route.
   

• Key thoughts: The NJ ELSS Tax Saver offers tax benefits under Section 80C of the Income Tax Act. Investors can get the benefit of exemption up to the outer limit of Rs1.50 lakhs per annum. This reduces the effective upfront investment and substantially enhances the yield on the investment in the long run.

UTI Nifty 500 Value 50 Index Fund

The fund comes from the reputed UTI fund house, which is the oldest mutual fund set up in India. It had begun its operations in the year 1963 and US-64 was the first fund launched by UTI. Here are some of the key details about the NFO of UTI Nifty 500 Value 50 Index Fund.

• The main objective of the fund scheme is to provide returns that, before expenses, corresponds to the total return of the securities as represented by the underlying index, subject to tracking error. However, there is no guarantee or assurance that the investment objective of the scheme will be achieved, despite being an index product.
   

• It is an Open Ended scheme and falls under the category of index funds. One reason for the popularity of index funds is that under extant SEBI regulations there are not restriction on the number of index funds that an AMC can have.
   

• The index fund was launched on 26th Apr 2023 while it will be closing for subscription on 08th May 2023. There is no entry load or exit loads on these funds Index funds try to replicate the benchmark index on TRI (total returns index) basis. That is; they try to match the index in terms of dividends plus capital appreciation returns.
   

• The minimum subscription amount for this fund will be Rs5000 and in multiple of Rs 1/- thereafter. Investors can opt for the SIP model or the lump sum model.
   

• As a passive fund, the index fund does not try to beat the market. Instead, it just tries to match the performance of the index on a pre-cost basis. Most of the index funds are judged by a factor called the tracking error. The ideal index fund is the one with minimal tracking error; either on the upside or on the downside.

WhiteOak Capital Multi Asset Allocation Fund

WhiteOak Capital Multi Asset Allocation Fund is a multi-asset allocation fund which spreads its corpus across multiple classes of assets like equity, bonds, commodities, gold and derivatives, to better manage risk, automatically diversify risk and enhance the optimal returns in the long run.

• The primary investment objective of the Scheme is to provide long term capital appreciation and generate income by investing in instruments across multiple asset classes. These include equity, debt, gold, silver, ETFs, derivative products and related products including structures.
   

• It is an open ended multi asset allocation fund spreading its corpus across multiple asset classes like equity, debt, derivatives etc. The performance would depend on multiple asset class cycles but would be a more de-risked model too.
   

• The fund opened for subscription on 03rd May 2023 and the earliest closing date for the fund is 10th May 2023. However, the fund NFO is likely to be extended and it will now close on 17th May 2023.
   

• Being a multi-asset fund, it will have loads in-built in its model. Obviously, there are no entry loads in the fund at thus juncture. However, in respect of each purchase / switch-in of Units, an Exit Load of 1.00% is payable if Units are redeemed/switched-out within 1 month from the date of allotment. However, no exit load is payable if units are redeemed / switched-out after 1 month from the date of allotment.
   

• The fund has prescribed a minimum subscription amount Rs500/- and in multiples of Re. 1/-. For the purpose of taxation, it would depend on the mix of equity or hybrid debt or pure debt. The tax treatment differs in each of the cases.