Mutual funds' collections from New Fund Offers decline 42% in FY23

Hit by markets regulator Sebi’s ban on the launch of new fund offerings, mutual funds‘ collections through fresh schemes remained subdued at ₹62,342 crore in FY23, which was 42% lower than in the preceding fiscal. However, a higher number of NFOs were launched during the last financial year compared to the preceding year.

A total of 253 new schemes were floated in FY23, which was way higher than 176 new fund offers (NFOs) launched in FY22, according to the data compiled by Morningstar India. Moreover, in the current fiscal so far, AMCs have floated 12 NFOs in different categories, the industry data stated.

In the past fiscal year, fund managers focused on passive funds and fixed income categories like fixed maturity plans.

As per the data, a total of 182 open-end funds and 71 closed-end funds were launched in FY23, and cumulatively, these funds garnered ₹62,342 crore. In comparison, 176 NFOs were floated in FY22 and cumulatively, these funds were able to mobilise ₹1,07,896 crore while 84 new schemes were launched in FY21 raising ₹42,038 crore.

Usually, NFOs come during a surging market when investor sentiment is high and optimistic. The stock market performance along with positive investor sentiments led to higher fund mobilisation through NFOs in 2021-22. However, the NFO collections in FY23 were impacted by several factors such as three months ban imposed by Sebi on launching new schemes, highly volatile markets, FPI outflows and global factors, experts believe.