Widely read:
For the first time, there were over a hundred new equity and hybrid fund launches three years in a row, with 2023 witnessing 108 NFOs (new fund offers).
The fund houses of HDFC and ICICI have been the most active in the last three years, with both launching 30 new funds in the previous three years, 30 each across equity and hybrid categories. They are closely followed by Kotak and Mirae Asset , with 22 and 20 launches of new funds.
Another observation is the growing popularity of equity-oriented funds over debt funds since 2021, leading to fund houses launching more equity-oriented funds.
Interestingly, the large-cap category has witnessed 55 NFOs since 2021, the highest in the equity-oriented domain. Of them, 52 are passive funds, comprising ETFs (exchange-traded funds), index funds and FoFs (fund of funds).
Distribution of NFO flows
When it comes to NFO collections (the amount it received from investors), target-maturity funds (TMFs) cornered the maximum amount in the debt fund category.
In the equity universe, the multi-cap funds hogged the most money, while dynamic asset allocation funds were the most-loved hybrid fund in 2023, mainly due to SBI Balanced Advantage Fund 's hefty inflow of Rs 14,000 crore. Remarkably, just two funds in the dynamic asset allocation category accounted for 77 per cent of the total collection.
Performance analysis
We also looked at how the new NFOs have performed. However, we only chose those funds that ticked the following boxes:
-
It should have collected a minimum of Rs 2,000 crore during the NFO period.
- It has a minimum 12-month performance history.
Only fifteen new funds cleared the two criteria, out of which 11 outperformed their respective category average returns, and only five experienced a reduction in the assets they managed as of November 30, 2023.
The results have been a mixed bag if you look at the five most popular NFOs of the last three years. While SBI Balanced Advantage Fund, ICICI Pru Flexicap Fund and NJ Balanced Advantage Fund have outstripped their respective category average, the two multi-cap funds on this list - SBI Multicap Fund and Axis Multicap Fund - have lagged their average peer.
Performance of NFOs with highest collection
| Scheme | Return since inception (%) | Category average returns (%) | Category rank |
|---|---|---|---|
| SBI Balanced Advantage Fund | Launch: Aug 25, 2021 | 12.67 | 10.91 | 5/25 |
| ICICI Pru Flexi Cap Fund | Launch: Jul 12, 2021 | 19.3 | 15.83 | 13/60 |
| SBI Multicap Fund | Launch: Feb 22, 2022 | 16.2 | 23.69 | 14/14 |
| NJ Balanced Advantage Fund | Launch: Oct 22, 2021 | 11.2 | 10.49 | 11/26 |
| Axis Multicap Fund | Launch: Dec 10, 2021 | 17.68 | 18.24 | 9/13 |
| Note: Only equity and hybrid category NFOs since 2021 are considered | |||
Also read: Money magnets of 2023
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