NAV (Net Asset Value)

NAV stands for Net Asset Value.

It represents the per-unit value of a mutual fund scheme on a specific date. It is calculated by dividing the total value of all securities held by the fund (minus liabilities and expenses) by the total number of units outstanding. NAV is published daily after the market closes, typically by 9:00 PM on business days. What is NAV? Think of NAV as the price per share of the mutual fund. Just as a stock has a market price per share, a mutual fund unit has a NAV. If a mutual fund has ₹100 crores in assets and has issued 10 crore units, the NAV is ₹10 per unit. When the fund's assets grow to ₹110 crores, the NAV becomes ₹11 per unit, representing a 10% gain. The NAV of a mutual fund changes daily because the underlying securities (stocks, bonds, or gold) change in value daily. When you invest in a mutual fund, you buy units at the NAV of that day. If you invest ₹10,000 when the NAV is ₹10, you get 1,000 units. If the NAV rises to ₹12 over the next year, your investment is worth ₹12,000. One common misconception is that a lower NAV is "cheaper" and therefore a better investment. A fund with NAV ₹50 that grew 20% is better than a fund with NAV ₹10 that grew 10%. NAV alone does not indicate whether a fund is expensive or cheap — what matters is the fund's performance relative to its benchmark and peer group. For Liquid Funds (overnight mutual funds used as a savings alternative to FDs), the NAV is calculated with a precision of up to 4 decimal places. Many investors use liquid funds to park surplus cash for a few days to weeks. The NAV of liquid funds typically starts at ₹1,000 per unit, making per-unit pricing more granular. When redeeming mutual fund units, the redemption price is the NAV of that day minus any exit load. For equity funds with an exit load of 1% if redeemed within 1 year, if you redeem at a NAV of ₹12 and the exit load is ₹0.12, you receive ₹11.88 per unit. The NAV for all mutual fund transactions in India is declared on the Association of Mutual Funds in India (AMFI) website and on individual fund house websites by 11:00 PM on working days.