NFOs Surge in January: Thematic, Factor-Based Funds Dominate; Should You Invest?

• New Fund Offers (NFOs) are seeing a significant surge in January 2026, primarily focusing on thematic, factor-based (Smart Beta), and sector-specific funds.
• Asset management companies are shifting strategies, moving away from broad categories to capture investor appetite with specialized products.
• According to AMFI, 23 new open-ended funds launched in December, raising Rs 4,074 crore, with total NFO inflows for 2025 reaching Rs 3.03 lakh crore.
• Thematic funds, suitable for high-risk appetite investors, offer exposure to areas like infrastructure and clean energy, differing from sector-specific funds by investing across multiple sectors.
• Financial advisers recommend aligning investments with financial goals, time horizon, and risk appetite, cautioning against short-term trends and emphasizing controlled risk management.

Why It Matters: January sees a rush of specialized NFOs; investors should align choices with personal financial goals and risk.