1. Sebi has mandated that each AMC can have only 1 fund in each of the various clearly spelt out categories, as far as Open-ended funds are concerned.
2. Therefore, AMCs can't offer NFOs where they already have a presence, under any pretext whatsoever.
3. But Sebi has allowed AMCs to issue NFOs in all categories where they don't have a presence yet, hence we can expect NFOs in most categories, as even the biggest AMCs don't have presence in all of them yet.
3. Therefore, it would be interesting to watch how these NFOs, offered in "pre-standardized" categories, but belonging to many reputed AMCs with star fund managers, would perform in the long term to become game-changers.
4. Currently, Existing Funds enjoy patronage by investors due to:-
a) Being tested products with past track record,
b) User experience feedback with fund ratings,
c) Known underlying portfolios to decide selection,
d) Known TER and AUMs, and
e) SIP facility from the first investment itself.
5. However, Existing Funds have often suffered due to:-
a) Accumulation of "baggage" with time, reflected in their NAVs,
b) Bad decisions of their previous fund management teams, and
c) Heavy cashflows (in and out) with occassional discomfort.
6. Only time will tell whether such NFOs will be able to offer a "cleaner slate" with no previous "baggage", although they would have no previously declared time-tested portfolio, nor any price advantage, and higher TER too due to their smaller AUMs.
2. Therefore, AMCs can't offer NFOs where they already have a presence, under any pretext whatsoever.
3. But Sebi has allowed AMCs to issue NFOs in all categories where they don't have a presence yet, hence we can expect NFOs in most categories, as even the biggest AMCs don't have presence in all of them yet.
3. Therefore, it would be interesting to watch how these NFOs, offered in "pre-standardized" categories, but belonging to many reputed AMCs with star fund managers, would perform in the long term to become game-changers.
4. Currently, Existing Funds enjoy patronage by investors due to:-
a) Being tested products with past track record,
b) User experience feedback with fund ratings,
c) Known underlying portfolios to decide selection,
d) Known TER and AUMs, and
e) SIP facility from the first investment itself.
5. However, Existing Funds have often suffered due to:-
a) Accumulation of "baggage" with time, reflected in their NAVs,
b) Bad decisions of their previous fund management teams, and
c) Heavy cashflows (in and out) with occassional discomfort.
6. Only time will tell whether such NFOs will be able to offer a "cleaner slate" with no previous "baggage", although they would have no previously declared time-tested portfolio, nor any price advantage, and higher TER too due to their smaller AUMs.