Are NFOs worth investing in?
- Ajay
Value Research Stock Advisor has just released a new stock recommendation. You can click here to learn more about this premium service, and get immediate access to the live recommendations, plus new ones as soon as they are issued.
Mostly not. Mutual fund houses are in the business of launching funds, as then only they can build a history. But investors have the luxury of choosing a fund that has some credible history. One does not know which is a great fund. The best way of looking at or evaluating a fund is to check how it has done in a good or bad market phase. And such information isn't available for a new fund.
However, the only exceptional situation is if an NFO is bringing in a new category of fund for which, you believe that the case is very compelling. For example, a few months back, we had a situation where real estate investment trust (REIT) came into being as an NFO for the first time. So, if you think that its case is very compelling or worth considering, then you may go for it. But generally speaking, NFOs are not quite worth taking into consideration.
