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New Fund Offer (NFO): Detailed Overview

A New Fund Offer (NFO) is the first launch of a mutual fund scheme by an asset management company. It allows investors to invest... Read more in a new fund at its starting stage. An NFO is open for a limited time, usually 10–15 days, during which units are offered at a fixed price. After the offer closes, the scheme is listed and its value changes according to its Net Asset Value (NAV). NFOs may suit investors seeking long-term participation from the start. Read less

A New Fund Offer (NFO) is the first launch of a mutual fund scheme by... Read more an asset management company. It allows investors to invest in a new fund at its starting stage. An NFO is open for a limited time, usually 10–15 days, during which units are offered at a fixed price. After the offer closes, the scheme is listed and its value changes according to its Net Asset Value (NAV). NFOs may suit investors seeking long-term participation from the start. Read less

New Fund offer

In this policy the investment risk in the investment portfolio is borne by the policyholder.

Pay ₹8,520/month¹ for 10 years

Get ₹1 Cr Life Cover + ₹2.2 Cr
Tax-free² Returns (@14.53%)

Introducing

5 yr Index Returns³: 29.46%

10 yr Index Returns³: 14.53%

Starts at ₹1,000/month

¹Illustrative returns @4%: ₹10.8 Lakh, @8%: ₹35.2 Lakh, @₹14.53%: ₹2.24 Cr
Policy term: 35 years. Past performance is not indicative of future performance. T&C apply. The linked insurance product do not offer any liquidity during the first five years of the contract. The policy holder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.

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What is NFO & what are the types of NFO?

NFO meaning refers to the first time a mutual fund scheme is made available for public investment at a fixed price before it becomes tradable in the market. Let's look at the types of NFO.

Open-ended NFO
These funds allow you to buy or sell units even after the initial offer ends at the current NAV. This type offers flexibility for investors.
Closed-ended NFO
Investors can only subscribe during the NFO period. After this, no new investments are accepted, and units trade on the stock exchange.
Interval NFO
Interval funds mix features of both open-ended and closed-ended funds. You can buy or redeem units at regular intervals during the year. This gives some flexibility along with structured investment opportunities.

Fund is available with Tata AIA ULIP Plans

Solution Composition

This advertisement is designed for combination of benefits of following individual and separate products named (1) Tata AIA Smart Sampoorna Raksha Supreme Unit Linked, Non-Participating Individual Life Insurance Plan (UIN: 110L179V02) and (2) Tata AIA Health Buddy, Non-Participating, Non-Linked, Individual Health Product (UIN: 110N183V01).These products are also available for sale individually without the combination offered/ suggested.

Tata AIA

Param Raksha Life Pro +

Multicap fund delivered 21.54% returns (Benchmark:14.86%)⁶
All funds rated 4 or 5 stars⁴
Avail high life cover

Calculate Returns

Solution Composition

Tata AIA Premier SIP is a combination of the Tata AIA Smart SIP, a non-participating, unit-linked, individual life insurance savings plan (UIN: 110L174V02), and Tata AIA Health Buddy, Non-participating, Non-Linked, Individual Health Product (UIN:110N183V01). Both Tata AIA Smart SIP and Tata AIA Health Buddy are also available for sale individually.

Tata AIA

Premier SIP

No Premium Allocation charges
All funds rated 4 or 5 stars⁴
Start at ₹1000/month

Calculate Returns

Key features & benefits of NFO

The features and advantages of investing in NFOs are as follows:

Fixed price
One key advantage of investing in NFOs is the fixed offer price during the subscription period.
Early access to new plans
Investors can get into a new mutual fund scheme at the outset, potentially benefiting from growth from inception.
Diversification opportunity
Adding a new fund can broaden your investment mix with exposure to different sectors or asset classes.
Potential for growth
Since funds start fresh, there’s a chance to benefit from growth over time if markets rise.

How to invest in NFOs

After understanding NFO benefits, let's understand the steps to invest in NFO.

Step 1: Through a broker

Discuss available NFOs with a broker or financial advisor who can help you understand the fund strategy and complete the investment process on your behalf professionally.
Step 2: Via an online investment account

Many banks and mutual fund platforms allow online NFO applications with digital access, fund comparisons, and portfolio tracking through a paperless investment process.
Step 3: Using third-party websites

Visit financial platforms that list multiple NFOs. These sites help compare fund options and provide tools to make an informed choice before subscribing.

NFO vs IPO

The following table highlights the difference between NFO and IPO:

Characteristics	New Fund Offer (NFO)	Initial Public Offering (IPO)
Meaning	NFO refers to the launch of a new mutual fund scheme.	IPO refers to a company issuing shares to the public.
Issued By	The offer is issued by an asset management company.	The offer is issued by a corporate entity.
Intent	The objective is to introduce a new mutual fund scheme.	The objective is to create a new stock market listing.
Fund Utilisation	The collected money is invested in bonds or equities by the AMC.	The raised capital is used for expansion and business needs.
Valuation	Pricing is based on an NAV-based unit structure.	Pricing is influenced by P/E and P/B ratios.
Risk	The risk level is low to moderate, depending on the fund type.	The risk level involves higher market-linked stock exposure.
Performance Comparison	There is no past scheme record available for comparison.	Past business history can be reviewed for evaluation.
Listing	The fund begins after investments are deployed.	The shares list directly on exchanges.
Demat Requirement	A Demat account is not required.	A Demat account is required.

Things to consider before investing in NFOs

Before investing in NFOs, consider the following:

Clarity of fund purpose
Confirm that the scheme objective matches your long-term financial requirements and expected investment horizon.
MAC track record
Review the AMC’s credibility, past fund handling experience, and consistency in managing similar schemes.
Entry and exit charges
Check the minimum investment requirement and understand whether an exit load applies on early withdrawals.
Scheme portfolio and allocation plan
Read the offer document carefully to know how the fund plans to allocate assets across equity, debt, or other instruments.
Risk and instrument category
Ensure the fund type aligns with your personal risk tolerance, return expectations, and overall portfolio structure.
Comparable with other alternatives
Compare the NFO with existing mutual fund schemes in the same category before making an investment decision.
Lock-in or tenure conditions
Identify whether the NFO is open-ended or closed-ended, as this impacts liquidity and redemption.

Why choose Tata AIA for investing in NFOs

Tata AIA provides structured investment solutions with a strong focus on transparency and customer support. Investors can access NFO opportunities with clear scheme information and guided assistance. Tata AIA follows regulatory frameworks and offers tools that support informed decision-making. The organisation has a trusted legacy, serving diverse financial needs across India.

Digital access: Tata AIA offers simple online account management and tracking options for NFO investments.
Customer-centric guidance: Assistance in understanding NFO scheme documents and investment processes.
Trusted brand legacy: Joint venture strength of the Tata Group and AIA.
Regulatory compliance focus: Transparent disclosures aligned with IRDAI standards.

Conclusion

A New Fund Offer gives investors a chance to enter a mutual fund scheme at its launch stage. The subscription period stays limited, with units generally priced around ₹10. After listing, NAV decides the fund’s value. Investors should assess objectives, strategy, and background of the fund house before investing. NFOs may suit long-term planners who prefer early participation in a new fund while keeping risk considerations in mind.

Is NFO better than SIP?

NFOs may offer early entry into a new scheme, while SIP focuses on regular investing. SIP usually spreads risk over time.

What’s the ideal way to monitor an NFO’s performance?

One can monitor the NFO's performance by tracking NAV movement, portfolio allocation, and consistency with the stated objective over time.

How long does NFO last?

An NFO usually stays open for a few days to a few weeks, depending on the scheme.

Is NFO tax-free²?

No. NFO investments are taxed like other mutual funds based on fund type and holding period.

The linked insurance product do not offer any liquidity during the first five years of the contract. The policy holder will not be able to surrender/withdraw the monies invested in linked insurance products completely or partially till the end of the fifth year.
Tata AIA Enhanced Value Index Fund is part of a various funds which a policyholder can choose from. For further details on funds refer the sales brochure.
Tata AIA Enhanced Value Index Fund SFIN: ULIF 098 16/02/26 EVI 110
Tata AIA Premier SIP is a combination of the Tata AIA Smart SIP, a non-participating, unit-linked, individual life insurance savings plan (UIN: 110L174V02), and Tata AIA Health Buddy, Non-participating, Non-Linked, Individual Health Product (UIN:110N183V01). Both Tata AIA Smart SIP and Tata AIA Health Buddy are also available for sale individually.
Param Raksha Life Pro + is designed for combination of benefits of following individual and separate products named (1) Tata AIA Smart Sampoorna Raksha Supreme Unit Linked, Non-Participating Individual Life Insurance Plan (UIN: 110L179V02) and (2) Tata AIA Health Buddy, Non-Participating, Non-Linked, Individual Health Product (UIN: 110N183V01). These products are also available for sale individually without the combination offered/ suggested.
¹Illustration shows a monthly premium of ₹8,520 for Tata AIA Param Raksha Life Pro + for a 30-year-old male, standard life, premium payment term: 10 years, policy term: 35 years with 100% investment in Tata AIA Enhanced Value Index Fund in Future Secure plan option. 4% and 8% are assumed rates of return. 14.53% is the 10-year return of BSE 500 Enhanced Value 50 Index as of December'25. Maturity amount: ₹10,80,024 at 4% returns, ₹35,20,478 at 8% returns and ₹ 2,24,89,471 at 14.53% returns. The fund value calculation is done by projecting the past returns of BSE 500 Enhanced Value 50 Index after adjusting for all expenses in Tata AIA Param Raksha Life Pro+. The above values have been calculated assuming 14.53% p.a. gross investment returns, which is the past 10-year return of BSE 500 Enhanced Value 50 Index Fund as of December'25.
Some benefits are guaranteed, and some benefits are variable with returns based on the future performance of your insurer carrying on life insurance business. If your policy offers guaranteed benefits, then these will be clearly marked “guaranteed’ in the illustration table on this page. If your policy offers variable benefits, then the illustrations on these pages will show two different rates of assumed future investment returns. Currently the gross investment returns are stipulated as 4% p.a. and 8% p.a. These assumed rates of return are not guaranteed, and these are not the upper or lower limits of what you might get back, as the value of your policy is dependent on a number of factors including actual future investment performance.
²No Goods and Service Tax shall be applicable on Individual life insurance products as per prevailing laws. Income Tax benefits would be available as per the prevailing income tax laws, subject to fulfillment of conditions stipulated therein. The Tax-Free income is subject to conditions specified under section 10(10D) and other applicable provisions of the Income Tax Act,1961. Tata AIA Life Insurance Company Ltd. does not assume responsibility on tax implications mentioned anywhere on this site. Please consult your own tax consultant to know the tax benefits available to you.
³Benchmark Fund: BSE 500 Enhanced Value 50 Customised Index. Data as of December 31, 2025. Source: BSE Indices Factsheet. Source link - https://www.bseindices.com/Downloads/Factsheet/Factsheet_BSE500EnhancedValue50_Dec2025.pdf
⁴All funds open for new business which have completed 5 years since inception are rated 4 or 5 Star by Morningstar as of August 2025.
⁶5-year computed NAV for Tata AIA Multi Cap Fund as of December 2025. Other funds are also available. Benchmark of this fund is S&P BSE 200.
Unit Linked Life Insurance products are different from traditional insurance products and are subject to risk factors. The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of funds and factors influencing the capital market and the insured is responsible for his/her decisions. The various funds offered under this contract are the names of the funds and do not in any way indicate the quality of these plans, their future prospects and returns. The underlying Fund’s NAV will be affected by interest rates and the performance of the underlying stocks. The fund is managed by Tata AIA Life Insurance Company Ltd. (hereinafter the Company"). The performance of the managed portfolios and funds is not guaranteed, and the value may increase or decrease in accordance with the future experience of the managed portfolios and funds. Past performance is not indicative of future performance. Returns are calculated on an absolute basis for a period of less than (or equal to) a year, with reinvestment of dividends (if any). All investments made by the Company are subject to market risks. The Company does not guarantee any assured returns. The investment income and price may go down as well as up depending on several factors influencing the market. Please know the associated risks and the applicable charges, from your insurance agent or the Intermediary or policy document issued by the insurance company.
The products are underwritten by Tata AIA Life Insurance Company Limited. The plans are not guaranteed issuance plans, and it will be subject to Company's underwriting and acceptance. Whilst every care has been taken in the preparation of this content, it is subject to correction and markets may not perform in a similar fashion based on factors influencing the capital and debt markets; hence this advertisement does not individually confer any legal rights or duties. This is not an investment advice, please make your own independent decision after consulting your financial or other professional advisor.
The fund is managed by Tata AIA Life Insurance Company Ltd. (hereinafter the Company).
Tata AIA Life Insurance Company Limited is only the name of the Insurance Company & the Unit linked insurance product with Tata AIA /Tata AIA Life Insurance as its prefix is only the name of the Unit Linked Life Insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns.
Buying a Life Insurance policy is a long-term commitment. An early termination of the policy usually involves high costs, and the Surrender Value payable may be less than the all the Premiums Paid.
Insurance cover is available under the product. For more details on risk factors, terms and conditions please read sales brochure carefully before concluding a sale.
The products are underwritten by Tata AIA Life Insurance Company Limited.
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