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

4 responses to “What is NAV and how it is calculated”

  1. […] is reinvested in the same scheme, not distributed amongst the investors. This gets reflected in the NAV of the scheme, no interim payments whatsoever are made out of the fund holdings. The investor gets […]

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  2. […] intervals, STP assists in averaging out the cost of investors by purchasing more units at a lower NAV and vice versa same like an SIP. 3.  Rebalancing Portfolio. STP facilitates in rebalancing the […]

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  3. […] is reinvested in the same scheme, not distributed amongst the investors. This gets reflected in the NAV of the scheme, no interim payments whatsoever are made out of the fund holdings. The investor gets […]

    Liked by 1 person

  4. […] (Folio Number) and puts units of new launched scheme to that account. Each unit price (called Net Asset Value or NAV) is usually 10 at the time of fund’s […]

    Liked by 1 person

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