An investment into a New Fund Offering (NFO) helps investors take the benefit of early investment before they are listed on the stock market. However, with no records regarding performance and returns, investors may find it difficult to plan an investment into an NFO. Therefore, Investors can take the assistance of an SIP calculator online to make Investment into an NFO more reliable.
Helping investors analyze the future returns based on small consistent investments into a dedicated fund, an SIP calculator can make the NFO investment more effective and ensure decisive investing. Let’s first understand the meaning of an NFO and how a SIP calculator can help with planning investment into an NFO.
New Fund Offering (NFO)
A New Fund Offering (NFO) is a mutual fund scheme that is in the initial stages of getting launched and listed on the stock market. Available at a lower face value as compared to listed funds on the stock market, an NFO offers an opportunity for investors to generate significant returns through early investment.
However, they do not possess any past data or records related to past returns making it quite difficult for investors to make the right selection before investment.
The following points can help understand the best ways to use an SIP calculator online to plan investment into an NFO and get the best returns possible:
Calculate SIP Amount
A SIP calculator can decide the best SIP amount that fits within their income level and risk-taking capacity. One can identify a SIP amount using a SIP calculator by considering different factors like income level, expenses, and even the ultimate financial goals. This way investors can invest an SIP amount that matches their limit into an NFO.
Estimate Expected Return
Though an NFO does not have records of past performance and rate of return, a SIP calculator can help calculate the expected rate of return based on the historical returns from similar funds of the same category. One can select different funds offered by the same or different asset management companies and identify the historic returns to make an investment decision into an NFO.
Calculation of Future Value
One can even calculate the future value of their investments into an NFO helping them to decide whether an investment will generate sufficient returns or not. With the calculation of the maturity amount, an SIP calculator can help investors adjust their SIP amount, reassess their investment strategy and even decide whether investment into an NFO would fulfil investor goals.
Conclusion
Investors can make informed decisions regarding investment in an NFO using an SIP calculator. With the calculation of the future value of investments and expected returns, you can analyze whether SIP in the NFO would offer sufficient returns to match the investor’s financial goals.
Moreover, one must opt for complete research and analysis of the NFO and underlying asset management company before investment to protect the capital and prevent losses. An SIP calculator can help investors make various important decisions necessary before selecting an NFO and making an investment.
