InvestorQ : Can you differentiate between IPO, NFO, mutual fund, and Small cases?
Ankit Patil made post

Can you differentiate between IPO, NFO, mutual fund, and Small cases?

Swapnil Sarang answered.
2 years ago
All of them are related but not similar in any sense. Let us understand each term separately:

Small cases: A small case refers to a strategically weighted basket of up to 50 stocks that are collected/invested to reflect a theme or idea. Now, these are centered around specific motives, say:

  • According to risk profiles
  • According to a particular financial model
  • According to trending market theme, etc.

Small cases are portfolios that reflect a market theme and provides exposure to trending market themes, strategies, and styles. These are highly liquid and are also inexpensive. You could add only NSE stocks to these small cases as of now.

Mutual Fund: This is a type of investment vehicle in which money is pooled from different investors to invest in various securities like stocks, money market instruments, bonds, and other assets. Mutual funds are managed by professionals whose main motive is to get the best returns for investors.

IPO: It stands for Initial Public Offer, and refers to the process of offering shares of a private corporation to the public at large in a new stock offering. This process allows a company to raise funds from public investors. To bring their IPOs to the market, the companies need to get themselves listed in the stock exchanges and must meet the requirements of SEBI/SEC to hold an IPO.

NFO: This stands for New Fund Offer. It is a first-time subscription offer for a new scheme launched by an Asset Management Company (AMC). An AMC launches an NFO to raise funds for investment in various securities like stock, debt instruments, government bonds, etc. Since every mutual fund is set up with a pre-decided objective, so investment is made in such a manner.