What were the big new fund offering themes or NFO themes of 2021?

IPOs may have cornered all the attention but the year 2021 also saw record NFO flows into mutual funds. At Rs.79,005 crore in first 11 months, 2021 has been the best year in history for mutual fund NFOs. But what are the big themes that played out?

· Unlike the normal NFO waves of 1999 and 2007, this NFO wave is not impacted by any particular sector or theme. For example, it was IT in 1999 and Infrastructure in 2007.

· For year 2021, the NFO story was dominated by Flexi Cap funds and Balanced Advantage Funds (BAF). These 2 categories accounted for 50% of all NFO collections in 2021.

· The leader in NFO collections in 2021 was the SBI BAF, which collected Rs.14,505 crore in its NFO; the largest ever in history of any mutual fund NFO.

· The other big NFO during the year was the ICICI Pru Flexi Cap NFO that collected a record Rs.9,808 crore, making it the largest equity fund NFO ever.

· NJ Balanced Advantage collected Rs.5,216 crore and set the record for the biggest NFO collection by a maiden NFO of any mutual fund in the past.

· Apart from BAFs and flexi caps, the NFO themes were spread across business cycle funds, focused sector funds, international Fund of Funds and floater funds.

· Demand for floater funds was logical considering the hawkish signals through the year and a spike in inflation.