8.6What is NAV?
1What is it?
NAV (Net Asset Value) is the price of one unit of a mutual fund, calculated at the end of every business day.
2Why does it exist?
It tells you what each unit is worth and is the price at which you buy or redeem.
3Calculation
NAV = (Total assets − Liabilities) ÷ Units outstanding
- Fund holds ₹1,050 crore of investments, owes ₹50 crore in expenses.
- Units outstanding = 50 crore.
- NAV = (1,050 − 50) ÷ 50 = ₹20.
NAV = ₹20 per unit.
4Risks
- A low NAV does not mean a cheap fund. A ₹10 NAV fund isn’t "cheaper" than a ₹500 NAV fund; only the % change matters.
5Quick revision
- NAV = value per unit.
- Calculated daily.
- Low NAV ≠ cheap.
6Knowledge check
Q1. Assets ₹500 cr, liabilities ₹0, units 25 cr. NAV?Show answer
₹20.
Q2. Is a ₹10 NAV fund better value than a ₹100 NAV fund?Show answer
No. Returns depend on % change, not NAV level.
Q3. How often is NAV calculated?Show answer
Every business day.
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