Net Asset Value (NAV)

What is Net Asset Value?

The net asset value (NAV) of a mutual fund or an ETF is the standard term utilized by investors and fund managers to assess mutual funds. It denotes the aggregate market value of all assets held in an investment portfolio, encompassing stocks and bonds, less liabilities. It is computed on a per-share basis and serves as an indicator of the current market value of managed investments.

How to get Same Day NAV in Mutual Funds?

NAV Cut-off Times for Mutual Funds (per SEBI regulations)

1. For Liquid and Overnight Funds:

• Same day NAV applies for transactions executed before 1:30 PM.
• Post 1:30 PM, the NAV of the subsequent working day is applicable.

2. Additional Mutual Funds (Equity, Debt, Hybrid, etc.)

• Before 2:00 PM, the same day NAV is applicable, depending to the availability of the funds being credited to the mutual fund's account.
• After 2:00 PM, the Net Asset Value (NAV) of the subsequent business day becomes effective.

Where to Verify the NAV?

• Websites of mutual fund companies
• AMFI (Association of Mutual Funds in India)
• Stock exchanges like NSE and BSE

How to Calculate the NAV of Mutual Funds & SIPs?

To calculate the NAV, first aggregate the market value of all assets, then deduct the entire liabilities from this sum, and finally divide the result by the total number of outstanding shares.

Net Asset Value Formula

NAV = (Total Asset Value - Total Liability Value) / Total Outstanding Shares

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Importance of NAV

1. It enables the investor to obtain the value of their investment in a mutual fund.
2. The Net Asset Value (NAV) fluctuates in accordance with the market price of the underlying assets and is subject to daily alterations during trading sessions.
3. It is utilized to obtain entry and exit pricing when the investor acquires or divests units in a mutual fund.

Common Myths About NAV

• Lower NAV means a cheaper fund – Not true! A fund’s return depends on portfolio performance, not just NAV.
• Higher NAV funds are better – Not necessarily, as returns depend on past and future performance.