NFOs Surge Amid West Asia Tensions: Smart Beta to Smallcaps Offer New Opportunities

• February-March 2026 saw a surge in factor-based, arbitrage, thematic, and sectoral NFOs amidst the West Asia conflict.
• AMFI reported 14 new fund offers launched, providing new strategies as markets face volatility due to US-Israel-Iran tensions.
• Experts suggest NFOs offer a "strategic clean slate" for investors, enabling fund managers to acquire quality stocks at distressed prices.
• Arbitrage, Smart Beta, and thematic funds are prominent, with recommendations for a limited 5-10% allocation.
• NFOs like Capitalmind Multi Asset Allocation and Motilal Oswal Multi Factor Passive FoF are designed for volatility, offering hedges through diversification into gold and commodities.