Mutual Funds and SIPs in India
NAV: How Fund Units Are Priced
The net asset value tells you what one unit is worth, calculated from the fund's holdings each day.
NAV is the fund’s price tag.
The formula
NAV equals the total value of the fund’s assets minus liabilities, divided by the number of units.
Daily change
It is updated at the end of each day as market prices change.
A common myth
A low NAV is not cheap and a high NAV is not expensive. What matters is the percentage return, not the unit price.
Buying and selling
You buy or sell units at the applicable NAV, plus any load if charged.
Same return, different NAV
A fund with a NAV of 20 and another at 200 both rise 10 per cent if their holdings rise 10 per cent.
Choosing funds by low NAV
NAV level says nothing about value.
Key takeaways
- NAV is the per-unit price.
- It updates daily.
- Low NAV is not cheap.
- Percentage return matters.
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