Mutual fund NFO filings double in 2025 even as fund mop up takes a hit

The total number of NFOs filed in 2024 reached 64, a 100% increase from 32 in 2023. This year’s NFOs include 28 new debt and equity offerings, 20 new asset management schemes, and 16 new mutual funds. This year’s NFOs also include 10 new private equity offerings. NFOs are a type of offering that allows investors to invest in a new fund without the need for an existing fund to be already established. NFOs are typically used by asset managers to raise capital from investors before the fund is formally established. NFOs are usually filed with the Securities and Exchange Commission (SEC) or the relevant regulatory body in the country. Once the NFO is filed, it is open to investors for a specific period, usually a few days or a week, depending on the regulatory requirements.

The top 5 debt funds in 2025 are: • SBI Magnum Multiplier Fund, • SBI Magnum Long Term Bond Fund, • ICICI Prudential Long Term Debt Fund, •

Some of these new schemes are focused on thematic investments, with 5 new schemes being filed for in the 2024 theme. This includes funds focused on renewable energy, electric vehicles, and sustainable energy. The renewed focus on sustainability is also evident in the new launches of Birla Sun Life Green Energy Fund and Tata Power Exchange Fund. These funds aim to capitalize on the growing demand for renewable energy sources and the increasing adoption of electric vehicles. The new launches of the Axis India Multi-Sector Growth Fund and the Motilal Oswal Active Momentum Fund are also expected to cater to the growing demand for sustainable investments, with a focus on a wide range of sectors, including technology, healthcare, and consumer goods. These funds are expected to benefit from the increasing trend of sustainable investing, which has been gaining momentum in the past few years.

The Decline of Debt Funds

The decline in debt funds is attributed to several factors, including the increasing competition from equity schemes and the growing awareness of the risks associated with debt investments. • Higher returns from equity schemes have made debt investments less attractive to investors. • The increasing competition from other investment options, such as mutual funds and exchange-traded funds (ETFs), has also contributed to the decline in debt funds.

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