Be Wary of NFOs | Value Research NFO investments are risky because they don't have a performance history to look into…
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Be Wary of NFOs

NFO investments are risky because they don't have a performance history to look into…

I invested in Sundaram Energy Opportunities fund during the NFO in 2008. Even after three years, the NAV of this fund is below Rs 10. Why is the fund not performing? What is your advice—should I hold or sell?
- S Ganesh Kumar

You had invested in the NFO of a thematic fund that invests in energy and energy-related companies. Such funds are risky and also do not have a performance history to look into before investing. Moreover, you invested at a time when the markets were on the rise and many new funds were being launched. Yes, the fund has fared badly and while we can empathize with your situation, the way out for you is to exit this fund. You would be better off cutting your losses now and investing in a consistently better performing fund.




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