Mutual Fund NAV: 7 Things New Investors Should Know
What is NAV?
NAV (Net Asset Value) is the per-unit price of a mutual fund. It represents the fund’s total assets minus liabilities, divided by the number of units.
How is NAV Calculated?
NAV = (Total Assets - Liabilities) ÷ Total Units. It is calculated daily at the end of the market session.
NAV & Fund Performance
A high NAV doesn’t mean better returns. Fund performance depends on asset growth, not just its NAV value.
Buying & Selling at NAV
You buy or sell mutual fund units based on the NAV of the day you place the request, which is finalized after market closure.
NAV & Market Fluctuations
NAV fluctuates daily based on market movements, interest rates, and fund asset value changes.
NAV Impact on SIPs
When investing via SIPs, NAV determines how many units you get. Lower NAV = More units, but growth matters in the long run.
NAV & Expense Ratio
A higher expense ratio slightly reduces NAV as fund expenses are deducted from the total assets before NAV calculation.