A total of 80 new funds were launched by the Indian mutual fund industry since January this year. The new fund offers have been in different categories and have varied investment strategies.

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A total of six of these new funds were able to garner more than Rs 1,000 crores in their inception month including the NFO period. The highest grosser on this list is the SBI Dividend Yield Fund. The scheme cloaked a total of Rs 3,661.01 crore in the inception month.

The next in the list is Axis Business Cycles Fund which garnered Rs 2,089.12 crore in the maiden month. Business cycles as an investment theme have been popular in the Indian mutual fund industry in the last two years. However, since the beginning of this year, passive funds have been the most popular when it comes to new launches. Of the 80 new schemes launched, 43 schemes are passive or index funds. These schemes range from equity to debt to thematic and more.

Let’s take a look at the highest-grossing NFOs of the year so far.

Source: Morningstar India

Apart from SBI and Axis, Tata Mutual Fund’s multi-cap scheme also managed to accumulate Rs 1,815 crore in its maiden month. ICICI Prudential’s innovation fund, which is a thematic fund also cloaked 1,700 crore in the inception month. Apart from the above-mentioned schemes, the HDFC Defence Fund was launched in June and has managed to garner a total of Rs 1,200 crore so far. Also, Mirae Asset’s Flexi Cap Fund also managed to garner Rs 603 crore in the first month.

However, a big brand name does not guarantee big flows in the NFO period. Schemes like HDFC S&P BSE 500 Index Fund which was launched in June saw a total inflow of Rs 1.37 crore in its maiden month. Similarly, Kotak Nifty Smallcap 50 Fund garnered a total of Rs 3.45 crore only in its inception month.

In 2023, these 81 new funds, including debt NFOs, have mobilised a total of Rs 19,926 crore. This shows that investors have shown interest in these new offerings. Another trend that was on display was a decline in Active NFOs. One reason for that is the strict direction by SEBI for having one active scheme in each category. Various market conditions have led to a significant 42 percent decrease in NFO collections during FY 2023.

In addition to established fund houses, several newly launched and small-sized fund houses have also joined the market by launching their own NFOs. Overall, NFOs in India in 2023 have seen a mix of growth and decline.

Mutual fund advisors always ask to retain investors to choose from schemes that have a good track record and hence ask them to stay away from newly launched funds. They believe that retail investors should choose schemes that have proved their mettle through different market conditions.