What is NAV and how it is calculated

What is Net Asset Value (NAV)?

Net Asset Value (NAV) is current market value of a unit of mutual fund. NAV represents the performance of a particular scheme of a Mutual Fund. In simple words, NAV is the price at which you buy a unit of mutual fund scheme. It is calculated by the total value of all the assets in a portfolio, minus all its liabilities dividing by total no of units.

How is NAV calculated?

NAV is calculated at the end of every market day, at the closing market prices of the securities in its portfolio. Daily change in NAV don’t matter for choosing an scheme. It is annualized return that tells about the scheme’s past performance. Generally, mutual fund units begin with a unit-cost of ₹10 and it rises as the fund’s assets under the AMC grows. So, a popular fund will have a higher net asset value than a less popular one.


Formula for calculating NAV is:
Net Asset Value = [Assets – (Liabilities + Expenses)] / Number of outstanding units

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