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Ramalingam Kalirajan |11337 Answers |Ask -Follow

Mutual Funds, Financial Planning Expert - Answered on Jul 02, 2026

Ramalingam Kalirajan has over 26 years of experience in MF distribution and wealth management. He holds an MBA in Finance from the University of Madras and is a CFP (Certified Financial Planner) credentialed professional. He is the Director of Holistic Investment, a Chennai-based AMFI-registered Mutual Fund Distribution (ARN-4188) and APMI-registered PMS Distribution firm (APRN07386), helping clients build long-term wealth through mutual funds and other investment solutions.... more

Question by AK on Jun 24, 2026

Dear Sir, is it advisable to invest in NFO of ICICI Pru Large & Mid Cap Advantage Fund considering an investment of Rs 1 lac per year for a period of 10-15 years?

Ans: Your thought process is good. A 10-15 year investment horizon is a major positive factor because long-term wealth creation depends more on time in the market than on entering at the NFO stage.

» Understanding the NFO Aspect

– An NFO is simply a new mutual fund being launched.

– Many investors feel Rs 10 NAV during NFO is cheaper than an existing fund with a higher NAV. In reality, NAV does not indicate whether a fund is cheap or expensive.

– Since the fund is new, there is no performance history available to evaluate how the fund manager handles different market cycles.

– Investing purely because it is an NFO is generally not a strong investment reason.

» Things To Evaluate Before Investing

– The investment philosophy and strategy should be clearly understood.

– Check whether the category already has several established funds with a proven long-term track record.

– Review the fund house's experience in managing large and mid-cap portfolios.

– Assess whether the fund fits into your overall asset allocation and portfolio structure.

» For A 10-15 Year Horizon

– A long investment period gives enough time to benefit from equity market growth.

– Large and mid-cap allocation can provide a balance between stability and growth potential.

– The long tenure can also help absorb short-term market volatility.

– Investing systematically every year and staying invested is often more important than selecting a newly launched fund.

» Possible Concern

– Since this is a new fund, there is no evidence yet of how it will perform compared to established funds in the same category.

– For a Rs 1 lakh yearly investment, many investors prefer funds that already have a long performance record, experienced fund management, and proven consistency across market cycles.

– An NFO may do well in future, but at present it comes with an additional uncertainty due to lack of track record.

» My Assessment

– I would not invest merely because it is an NFO.

– If the investment strategy suits your goals, you may consider allocating a limited portion initially and observe how the fund evolves.

– For the core part of your long-term portfolio, giving preference to well-managed, established actively managed funds with a consistent history is generally a more prudent approach.

– The good part is that your investment horizon of 10-15 years is ideal for equity investing. That itself improves the probability of achieving meaningful wealth creation over time.

» Finally

– The decision should not be NFO vs existing fund.

– The decision should be whether this fund category and investment strategy deserve a place in your portfolio.

– For long-term goals, track record, consistency, portfolio quality, and fund management experience are usually more important than investing at the NFO stage.

Best Regards,

K. Ramalingam, MBA, CFP,

AMFI-Registered MFD – ARN 4188

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.