4. Corpus : The face value of the units when multiplied by the total number of units issued, gives us the corpus of the fund. If the fund issues 50,000 units at a face value of Rs. 10 each, the corpus of the fund stands at Rs. 5,00,000, irrespective of its NAV. This corpus will rise if the fund further issues some more units.
7. New Fund Offer (NFO) : NFO is just like an IPO of shares. A new fund offer occurs when a new scheme is launched and it allows the investors to purchase the units of a close-ended scheme.
9. Close-end Fund : Unlike an open-end fund, the corpus of a close-end fund remains fixed. It allows the investors to purchase its units through a New Fund Offer (NFO). After the NFO closes, it does not allow the investors to buy or redeem the units directly from the funds. However, to provide the much needed liquidity, it gets listed on a stock exchange thus enabling the investors to buy or sell the units just like buying or selling the shares of a company.
Tags: Mutual Funds