💊 How Many New Medicines Did You Try Last Month?

If You Don’t Have Cancer, Would You Still Try a Newly Launched Cancer Drug?

Then Why Try Every New NFO?

Imagine this.

You visit a doctor for a regular check-up. Everything’s fine — you’re healthy.
But the doctor says, “There’s a new cancer medicine launched just last week! Want to try it?”

You’d probably laugh and say, “Why on earth would I do that? I don’t even have cancer!”

Exactly.

When it comes to our health, we trust tested medicines, not unproven experiments.
Yet when it comes to our wealth, many investors do the opposite — jumping into every New Fund Offer (NFO) that hits the market.

Just because something is new doesn’t make it better.

A 40-year-old client once came to me, confident about his ₹80,000 monthly SIP.

“I’ve diversified really well,” he said proudly. But when I opened his portfolio, here’s what I found:

He had 14 funds in his portfolio. 6 were NFOs, and the rest were only 2-3-year-old funds. Every fund NAV was around ₹10.

When I asked him why, he smiled and said,
“Because older funds have ₹500–₹2000 NAVs. I’m getting more units in the new ones!”

That’s when I realized — this myth is more common than we think.

The NAV Illusion: What Most Investors Miss

Let’s clear this up once and for all:

→ A fund with ₹10 NAV and a fund with ₹500 NAV can both deliver 12% returns.
→ Buying more units doesn’t mean you’re earning more.
→ NAV (Net Asset Value) is just a number — it tells you the per-unit price, not the fund’s potential.

If you invest ₹50,000 in either fund, both can grow to the same value depending on performance — regardless of whether you own 5,000 units or 22 units.

The only number that truly matters is how much your investment grows over time, not how many units you own.

NFOs vs Existing Mutual Funds: The Reality Check

Factor	Existing Mutual Funds	NFOs (New Fund Offers)
Track Record	Proven history across market cycles	No past data — only promises
NAV (Entry Price)	Can be ₹100 or ₹3000 — doesn’t affect returns	Always ₹10 at launch
Transparency	Full portfolio, holdings, risk ratios & past returns visible	Only strategy mentioned, no proof of execution
Risk Assessment	You can measure volatility & performance	Higher uncertainty — untested fund
Expense Ratio	Generally <2%	Often >2% during launch phase

NFOs are like a new train route — exciting, but untested.
Existing funds are like trains that have safely completed their journeys several times before.

But Then, Why Do People Still Fall for NFOs?

Because humans are wired to love novelty.

When something is new, our brain links it to opportunity and excitement.
That’s why NFO marketing often sounds irresistible — “New theme,” “fresh idea,” “limited period.”

And without realizing it, we start treating investing like shopping — not planning.

When (and How) an NFO Can Make Sense

To be fair, not all NFOs are bad.
Some introduce genuinely new opportunities or sectors — like infrastructure, technology, or ESG.

But here’s the key:
👉 Consider NFOs only after your core portfolio is built,
👉 most of your investments are linked to your financial goals, and
👉 you’ve already planned your emergency fund.

In other words — once your financial base is secure, a small, calculated exposure to an NFO can be explored.

You can consider them if:
✅ The fund’s objective aligns with your financial goal
✅ The fund manager has a strong past track record
✅ The theme isn’t already available through an existing fund
✅ The expense ratio is reasonable
✅ You’re comfortable with higher uncertainty
✅ You have good knowledge about the theme or sector (if it’s a thematic or sectoral NFO)
✅ You understand when to exit — because timing matters more in such funds
✅ You know which type of fund suits SIP investing and which one is better for lumpsum (for example, SIPs in volatile equity funds, lumpsums in balanced or hybrid funds)

If you can confidently tick these boxes, an NFO might fit as a small satellite investment — not the core of your portfolio.

Final Thoughts: The Smarter Way to Invest

In investing, tested beats trendy.

The real winners aren’t the ones who chase every new fund — they’re the ones who build a solid, time-tested portfolio that’s reviewed, monitored, and adjusted over time.

Because investing is not about owning more units.
It’s about owning the right strategy.

So before you get tempted by the next flashy NFO, ask yourself —

Would I try a new medicine without any illness?

If not, then why treat your financial health any differently?

(Disclaimer: This blog is for educational purposes only and should not be considered investment advice. Mutual fund investments are subject to market risks. Please read all scheme-related documents carefully and consult a  CFP or a SEBI-registered investment advisor before making any investment decisions.)

— Sonali Karia, CFP®
Founder, IART Financial Planning Services