Since September, the broader market indices -- BSE Midcap and BSE Smallcap -- have given returns of 17 per cent apiece, against 10 per cent return posted by frontline indices such as Sensex and Nifty.
After staying away from small-cap space for a long period, the country's oldest fund house -- UTI AMC -- has filed for a small-cap fund. IDFC AMC is another fund house that has launched a small-cap fund.
Also, fund houses are launching thematic funds to expand their product offerings.
Edelweiss MF has launched US Technology Fund of Fund (FOF). BNP Paribas MF has also filed for a technology fund, which will be an FOF investing in BNP Paribas Funds Disruptive Technology.
ESG funds that invest on the basis on environmental, social and governance standards of companies, have also seen some product launches.
Both Birla Sun Life MF and DSP MF have filed for an ESG Fund.
Meanwhile, Tata MF has launched a multi-asset fund, which will be the first MF scheme that would have exposure to the commodities basket. The foreign fund house HSBC AMC has filed for a focused equity product, which as the name suggests is mandated to make high-conviction bets with the number of stocks in the portfolio limited to 30 stocks.
According to experts, investors should be cautious when investing in NFOs. "We suggest investors to look at NFOs if the product is introducing a new concept or investment strategy. Otherwise, investors are better-off sticking to existing schemes, which have a longer track-record and have navigated various market cycles," said Amol Joshi, founder of Plan Rupee Investment Services.
"With an existing scheme, it is relatively easy to check whether the scheme has been true to its mandate, or it has moved away from it in the past," he added.
have been launching a slew of passive funds to tap into the rising investor interest in such schemes.
"Investors have become a bit more cost conscious and are showing interest in passive funds, where the expense ratios tend to be lower," Bala added.
Both Birla Sun Life MF and Nippon India MF have recently filed for a mid-cap index fund and a small-cap index fund.