New Delhi, April 20 -- New fund offers (NFOs) are often compared to IPOs in the mutual fund space - they offer investors a chance to enter a scheme at launch. While some NFOs bring new themes or strategies, many simply replicate existing offerings in a different format.

That makes the decision tricky. While the pitch may sound attractive, NFOs come with risks such as the absence of a track record and the uncertainty around how the strategy will play out.

First, let's understand an NFO in detail.

An NFO is the first-time launch of a mutual fund scheme by an asset management company (AMC). It is the period during which investors can subscribe to the fund before it becomes available for regular investment.

NFOs are often compared to IPOs...