NAV stands for Net Asset Value, which is the value of each unit of a mutual fund scheme. It is calculated by dividing the total value of the assets held by the mutual fund scheme, minus any liabilities, by the number of units outstanding.
A mutualfund NAV Value is calculated at the end of each business day and is based on the closing prices of the securities held by the scheme. The NAV of a mutual fund is therefore a representation of the market value of the mutual fund’s underlying assets.
For example, if the total value of the assets held by a mutual fund scheme is Rs. 100 crore and the number of units outstanding is 10 crore, the NAV of the scheme would be Rs. 10 per unit.
Investors use the NAV to track the performance of their mutual fund investments. A higher NAV indicates that the mutual fund’s underlying assets have appreciated in value, while a lower NAV indicates a decline in the value of the underlying assets. It is important to note, however, that the NAV does not take into account any expenses or fees charged by the mutual fund, such as management fees or transaction costs.
The NAV (Net Asset Value) of a mutual fund is calculated by dividing the net assets of the mutual fund by the number of units outstanding. Here are the steps to calculate the NAV of a mutual fund:
-
Determine the total value of the mutual fund’s assets: This includes the market value of all the stocks, bonds, and other securities held by the mutual fund, as well as any cash or cash equivalents.
-
Subtract any liabilities: This includes any expenses or fees owed by the mutual fund, such as management fees, administrative costs, and other expenses.
-
Divide the net assets by the number of units outstanding: This will give you the NAV per unit of the mutual fund.
For example, if a mutual fund has net assets worth Rs. 100 crore and the number of units outstanding is 10 crore, the NAV per unit of the mutual fund would be Rs. 10.
NAV = (Total value of assets – Total value of liabilities) / Number of units outstanding
It is important to note that the NAV of a mutual fund is calculated at the end of each business day based on the closing prices of the securities held by the scheme, and can fluctuate based on market movements and changes in the value of the underlying assets.
Also check:
