NAV

How it works

Net Asset Value is the price of one unit of a mutual fund. It is calculated as the total market value of all the fund's holdings, minus its liabilities and expenses, divided by the number of outstanding units. NAV is computed once at the end of each trading day (after markets close), so unlike a stock or ETF, a mutual fund's price doesn't change in real time. When you invest, you receive units at the applicable day's NAV.

Why it matters

NAV is how you track a fund's value and how your investment is measured — multiply your units by the latest NAV to get your holding's worth. The change in NAV over time (plus any payouts) is your return. It's the reference point for every buy, sell, SIP instalment and SWP withdrawal.

In India

AMCs publish NAVs daily on AMFI's website, and apps like Groww, Kuvera and Zerodha Coin display them. India uses a cut-off time rule: for most funds, money received and cleared before the cut-off (commonly afternoon for many schemes) gets that day's NAV; later, the next day's. For liquid funds, special same-day NAV rules apply when funds are realised in time.

Common mistakes

The single most common misconception is that a fund with a lower NAV is "cheaper" or better than one with a high NAV. This is wrong. NAV reflects how long the fund has existed and how much it has grown — a ₹15 NAV fund is not cheaper than a ₹500 NAV fund; both grow at the same percentage rate. What matters is percentage returns, strategy, risk and costs, not the absolute NAV. New investors who chase a "low NAV" or rush into new fund offers (NFOs) believing a ₹10 starting NAV is a bargain are making a basic but very common error — an NFO has no track record, and its starting NAV says nothing about future returns.