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A. Net Asset Value (NAV) shows you how a particular scheme of a Mutual Fund is performing. Mutual funds invest the money collected from the investors in the securities markets. In simple words, Net Asset Value is the market value of all the securities held by the scheme. As an investor, you will be issued units by the Mutual Fund. You will then become a unit-holder. This is akin to a shareholding buying stocks. NAV is measured on a per-unit basis. Since market value of securities changes every day, NAV of a scheme also varies on day-to-day basis. NAV is calculated by dividing the total net assets by the total number of units issued. Total net assets is the market value of all the assets a mutual fund holds, less any liabilities, as of a certain date. For example, if the market value of securities of a mutual fund scheme is Rs 200 crore and it has issued 10 crore units to investors, then the fund’s NAV per unit is Rs 20. NAV is required to be disclosed by mutual funds on a regular basis – either daily or weekly depending on the type of scheme.
