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Mutual funds collect Rs 1 18 Lakh Crore via NFO in 2024 thematic funds dominates space

NFOs are gaining popularity due to increasing demand for alternative investments and the rise of digital platforms.

The growth in NFOs is attributed to the increasing demand for alternative investments and the rise of digital platforms.

Asset Management Companies and NFOs

An Overview of NFOs

Asset management companies (AMCs) have been launching a significant number of new fund offerings (NFOs) in recent years. These NFOs have been attracting a substantial amount of capital from investors, with the total mobilisation reaching Rs 1.18 lakh crore in 2024. This is a substantial increase from the previous year, when 212 NFOs collected Rs 63,854 crore.

Factors Contributing to the Growth of NFOs

The growth in NFOs can be attributed to several factors. Some of the key drivers include:

  • Increasing demand for alternative investments: Investors are increasingly looking for alternative investment options that offer higher returns and lower risk. NFOs provide a way for investors to diversify their portfolios and invest in alternative assets. Rise of digital platforms: The rise of digital platforms has made it easier for investors to access NFOs and invest in them.

    The Nifty 50 index closed at 24,439.8 on December 31, 2023, and on January 2, 2024, it closed at 26,353.2.

    The Indian Stock Market in 2024: A Year of Exceptional Growth

    The Indian stock market experienced an extraordinary year in 2024, with the Sensex and Nifty indices witnessing significant growth. The Sensex, which is the benchmark index of the Indian stock market, jumped 5,898.75 points or 8.16 per cent, while the Nifty surged 1,913.4 points.

    Key Drivers of the Market’s Growth

    Several factors contributed to the exceptional growth of the Indian stock market in 2024. Some of the key drivers include:

  • Monetary Policy: The Reserve Bank of India (RBI) implemented expansionary monetary policies, which led to a decrease in interest rates and an increase in liquidity in the market. Economic Reforms: The government introduced several economic reforms, including the Goods and Services Tax (GST) and the Digital India initiative, which aimed to boost economic growth and create jobs.

    NFOs Attract Record Inflows Amid Low-Risk, High-Return Profile.

    The NFO market has seen a significant surge in inflows, with a total of Rs 1,43,000 crore invested in the first half of 2024.

    NFO Market Trends

    The NFO market has experienced a remarkable growth in the past few years, with a significant increase in inflows and a corresponding rise in the number of NFO launches. This growth can be attributed to the increasing popularity of NFOs among investors, who are attracted to the low-risk and high-return investment options offered by these funds.

    Key Statistics

  • Total inflows in the first half of 2024: Rs 1,43,000 crore
  • Highest number of NFO launches in a month: December 2024
  • Record inflow in April 2024: Rs 12,500 crore
  • Total NFO market size: Rs 5,00,000 crore

    • NFO Launches and Investor Preferences

    The NFO market has seen a significant increase in the number of launches in recent years, with many new funds being introduced to cater to the growing demand for NFOs.

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