Mutual Fund Houses Launch 19 New Schemes as Sensex Rebound Sparks NFO Surge

Mutual Fund Houses Launch 19 New Schemes as Sensex Rebound Sparks NFO Surge​

The mutual fund industry is witnessing a significant resurgence in activity as asset managers capitalize on improving market sentiment. Over the past month, 19 new fund offers (NFOs) hit the market, marking a sharp reversal from June, which saw only seven NFOs, the lowest monthly tally this year.

This comeback follows a period of cooling activity where March recorded 24 launches, followed by 11 in April and 13 in May. The recent surge reflects a renewed investor appetite as the market stabilizes after a volatile period.

Market Dynamics and Regulatory Tailwinds Driving Growth​

The rebound in new fund launches is closely tied to a steady improvement in market performance. After the Sensex and Nifty declined 2.8 percent and 1.9 percent respectively in May, both benchmark indices recovered in June with gains of 2.3 percent and 1.4 percent.

This positive momentum has carried into July, where both indices have advanced approximately 1 percent so far. The recovery is supported by the Reserve Bank of India's June policy initiatives, which focused on strengthening liquidity and attracting durable foreign currency inflows.

Specific measures included easing norms for FCNR(B) deposits and facilitating overseas fund mobilization by banks. These actions, combined with easing geopolitical tensions and resilient systematic investment plan (SIP) inflows, have bolstered investor confidence. Notably, foreign portfolio investors picked up buying in the second half of June following four months of sustained selling.

Significant Shifts in Fundraising and Net Inflows​

While the number of launches has increased, fundraising levels tell a more nuanced story of product composition. March saw high mobilization of ₹4,706 crore from mid-cap, small-cap, and sectoral funds.

Collections then moderated to ₹828 crore in April and ₹471 crore in May as the pipeline became dominated by passive products like index funds and ETFs. In June, collections stood at ₹460 crore, with the WhiteOak Capital Aggressive Hybrid Fund mobilizing ₹310 crore and The Wealth Company Large & Mid Cap Fund collecting ₹87 crore.

The underlying demand remains strong, evidenced by rising net inflows into equity schemes. Net inflows rose to ₹28,973 crore in June from ₹22,908 crore in May, providing a robust foundation for the current flurry of new fund launches.

Diversified Product Pipeline and Emerging Categories​

The latest wave of active equity launches includes a broad spectrum of funds such as Abakkus Large & Mid Cap Fund, The Wealth Company Mid Cap Fund, TRUSTMF Large & Mid Cap Fund, Baroda BNP Paribas Services Fund, NJ Value Fund, and NJ Momentum Fund.

Hybrid offerings are also gaining traction with the debut of AlphaGrep Multi Asset Allocation Fund and ICICI Prudential Balanced Hybrid Fund. Meanwhile, Zerodha Mutual Fund has made a distinct entry by launching the industry's first Life Cycle Funds, specifically the Life Cycle Fund 2036 and Life Cycle Fund 2041.

The passive segment continues to be a cornerstone of the industry. In 2025, passive products including index funds and ETFs accounted for nearly 60 percent of all NFOs. Current listings include Axis Nifty50 Equal Weight Index Fund, Motilal Oswal BSE Midcap 150 Momentum 30 Index Fund, Mirae Asset Nifty200 Momentum 30 Plus 8-13 Year G-Sec 75:25 Index Fund, Groww Nifty Cements ETF, and Edelweiss Nifty Metal ETF.

Expansion of Specialised Investment Funds​

Beyond conventional mutual funds, there is a visible uptick in activity within the Specialised Investment Fund (SIF) segment. This indicates that fund houses are increasingly looking toward sophisticated long-short strategies under the new SEBI framework.

June saw multiple launches including Kotak Mutual Fund's Infinity Hybrid Long-Short Fund, Platinum Mutual Fund's Hybrid Long-Short Fund, RedHex's Equity Long-Short Fund, and DynaSIF's Equity Ex-Top 100 Long-Short Fund. This momentum has extended into the current period with JioBlackRock Mutual Fund's Prism Hybrid Long-Short Fund and Invesco Mutual Fund's Summit Equity Long-Short Fund.

The expanding pipeline suggests a dual strategy by asset managers to offer both high-growth active equity solutions and sophisticated, rule-based passive and specialized strategies as market conditions continue to improve.