Stories
Don't Buy NFOs Just Because They're New, Choose Funds That Fit Your Portfolio: Nasser Salim
- •Nasser Salim, MD at Flexi Capital, advises investors to consider New Fund Offers (NFOs) only if they fill a gap in their existing portfolio, not just because they are new products.
- •Investors should review current holdings before considering an NFO, as existing products might offer similar exposure.
- •Salim recommends the Aditya Birla SL BSE Total Market ETF for broad equity exposure, suitable for first-time or passive investors, and the Nippon India CRISIL IBX FAR Gilt ETF for debt allocation, offering sovereign-backed exposure for a 3-5 year horizon.
- •He cautions against buying the FAR Gilt ETF solely due to India's inclusion in global bond indices, emphasizing stable income and potential capital gains as the primary investment case.
- •For contra funds like ICICI Prudential's, Salim suggests patience and a 7-10 year investment horizon, advising comparison of fund manager approach, historical performance, and risk-adjusted returns with existing contra funds.
Key Questions Answered
Investors should consider an NFO only if it fills a gap in their existing portfolio rather than buying simply because it is a new product. Nasser Salim, Managing Director at Flexi Capital, advises reviewing existing holdings first to ensure a current product doesn't already offer similar exposure.
For equity exposure, Salim prefers the Aditya Birla SL BSE Total Market ETF because it offers broad diversification suitable for first-time or passive investors. For debt allocation, he prefers the Nippon India CRISIL IBX FAR Gilt ETF, which provides sovereign-backed exposure for a three- to five-year horizon.
Salim noted that contra investing requires patience and is better suited to experienced investors with a seven- to 10-year investment horizon. He advised comparing the fund manager's approach, historical performance, and risk-adjusted returns with existing contra funds rather than investing just because the product is new.
