When company that is in the business of managing mutual funds (also called fund house or asset management company ) decides to launch a new scheme. The new launch is called New Fund Offering (NFO). The AMC will then advertise the fund to the potential investors, through ads in paper, TV and online. Interested investors then provide the money (called Application Money). The AMC gives the investors an account identified by a number (Folio Number) and puts units of new launched scheme to that account. Each unit price (called Net Asset Value or NAV) is usually 10 at the time of fund’s NFO.
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