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Market Intelligence › Basic Terminologies
A new fund's NAV is not cheap, and what to look at in it
Published by The Retail Trader · AUG 10, 2026 · Mutual Funds & AMC
An NFO is the first offer of a new scheme, where units are often available at ten rupees. Because of that number ten, people think it is cheap. That is not correct.
NAV is just the value of one unit. In a new scheme it starts at ten because nothing has happened yet — there is no concept of cheap or expensive in it.
An older fund's NAV is higher because its money has grown. It is not expensive, it is just older.
The decision should rest on these points:
• What gap this scheme fills that your portfolio does not already have.
• Funds already running in the same category have a track record — the new one does not.
• How specific its mandate is, and whether it matches your goal.
• Whether it has any lock-in or a different structure.
In a category that already has ten good funds, there should be a specific reason to pick a new one. A track record is a real asset, and an NFO by definition does not have it.
This article is for education only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory. Rules, rates and mechanics change from time to time with the exchange, SEBI and RBI, so verify every number yourself with your broker or an official source.