BAJAJ BROKING
March 25, 2025
4 mins read
Mutual funds are a widely used option for investors to participate in the financial markets, but their valuation can sometimes be confusing. A term that often comes up is "Mutual Fund NAV." So, what does it mean? Whether you’re exploring ways to invest in Mutual Fund options or learning Stock Market Basics, understanding NAV is essential. This article explains it in simple terms, providing clarity for navigating the mutual fund landscape.
Mutual Fund NAV stands for Net Asset Value, representing the price of one unit of a mutual fund. It reflects the fund’s worth at the end of a trading day. A mutual fund collects money from investors and allocates it to assets like stocks, bonds, or exchange-traded funds (ETF). The NAV is calculated by taking the total value of these assets, subtracting liabilities (such as management fees), and dividing by the number of outstanding units. This figure fluctuates daily as the prices of underlying assets—like stocks or bonds—change.
A common question is whether NAV should guide investment decisions. In reality, it’s not the primary factor to focus on. Some investors in India assume a lower NAV indicates a cheaper fund, similar to a bargain purchase. However, this is a misconception. For instance, a fund with a NAV of ₹20 and another at ₹50 could both deliver a 10% return—the growth depends on the fund’s performance, not its NAV. Instead of focusing solely on NAV, consider factors like historical returns, risk levels, and tools such as an SIP calculator or a lumpsum calculator for planning.
Here’s a comparison to clarify these terms:
Aspect | NAV | AUM |
Definition | Net Asset Value – price per unit | Assets Under Management – total fund value |
What It Shows | Value of one unit | Overall size of the fund |
Calculation | (Total assets - liabilities) ÷ units | NAV × total units issued |
AUM reflects the scale of the fund, while NAV shows the per-unit value. Both are useful but serve different purposes.
Checking a mutual fund’s NAV is straightforward:
Financial portals like Moneycontrol or the Association of Mutual Funds in India (AMFI) website also provide this data.
Unlike stock prices, which fluctuate throughout the day, Mutual Fund NAV updates once daily. Per SEBI regulations, most funds publish their NAV by 11 p.m. on each working day. Fund of Funds (FoF) updates by 10 a.m. the next day. This delay occurs because calculating the value of a fund’s assets—like stocks or bonds—requires end-of-day data. Here’s a snapshot:
Type of Fund | NAV Update Time |
Liquid/Overnight Funds | 11 p.m. same day |
Equity/Debt Funds | 11 p.m. same day |
Fund of Funds | 10 a.m. next day |
The cut-off time determines which day’s NAV applies to your transaction. For most funds (excluding liquid/overnight), orders placed before 3 p.m. get the same day’s NAV; after 3 p.m., it’s the next day’s NAV. Liquid funds have a 1:30 p.m. cut-off for purchases and 3 p.m. for redemptions. Additionally, SEBI mandates that units are allotted only after funds are credited to the fund house, a rule in place since 2021.
The NAV assigned to your transaction depends on timing. It’s computed daily using the closing market value of the fund’s assets (stocks, bonds, cash) minus expenses, divided by the number of units. Orders before the cut-off receive that day’s NAV; those after get the next day’s. This ensures fairness and aligns with market conditions.
A high NAV doesn’t imply a fund is costly or unattractive. Unlike stocks, a mutual fund’s NAV isn’t “overvalued”—it’s simply the asset value per unit. A NAV of ₹100 might indicate significant growth, while ₹10 could mean a newer fund. The key is the fund’s performance, not its NAV. Evaluate returns, risks, and alignment with your goals when considering mutual fund options.
The Sensex (30 major BSE companies) and Nifty (50 major NSE companies) influence NAV based on a fund’s holdings. Large-cap funds, heavily tied to these indices, see their NAV rise or fall with Sensex/Nifty movements. Multi-cap funds, with diverse portfolios, may experience milder effects, while mid- and small-cap funds might feel indirect ripples. The impact hinges on the fund’s asset allocation.
NAV and stock prices both reflect value but differ in dynamics. NAV is the per-unit value of a fund’s assets, updated daily. Stock prices, however, fluctuate with market demand—rising with interest and falling without it. NAV remains unaffected by investor sentiment, moving only with asset values, making it distinct from stocks in Stock Market Basics.
Understanding Mutual Fund NAV equips Indian investors with a clearer view of their holdings, whether exploring ETF options, bonds, or equity funds. It’s the daily price of a fund unit, tied to market performance, but not the sole factor in decision-making. Use this knowledge alongside tools like an SIP calculator or a lumpsum calculator for informed planning.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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NAV stands for Net Asset Value. It’s the price per unit of a mutual fund, reflecting its worth after accounting for assets like stocks or an ETF, minus liabilities. NAV is an essential for those looking to invest in Mutual Fund options.
SIP, or Systematic Investment Plan, lets you invest in Mutual Fund options by contributing a fixed amount regularly. Using a SIP Calculator to estimate returns over time is useful for steady growth without the need for timing the market.
NAV is calculated by taking the total value of assets (stocks, bonds, ETF holdings, etc.), subtracting liabilities like fees, and dividing by the number of units. This happens daily to reflect market changes.
NAV updates by 11 p.m. daily for most funds, per SEBI rules. Fund of Funds updates by 10 a.m. the next day. Being versed with these timings is useful if planning with a Lumpsum Calculator or SIP Calculator.
Most mutual funds report NAV by 11 p.m. each working day. Fund of Funds reports by 10 a.m. the next day, reflecting assets like an NPS Scheme or stocks, ensuring accurate valuation.
Mutual funds update NAV at 11 p.m. daily for equity, debt, or ETF-based funds. Fund of Funds updates at 10 a.m. the next day, aligning with end-of-day pricing.
NAV updates are processed overnight, finalized by 11 p.m. for most funds or 10 a.m. the next day for Fund of Funds (known as FoF). This reflects daily changes in assets, which can be invaluable to track when investing in Bonds and other financial instruments.
Check today’s NAV on fund websites, AMFI, or financial platforms. Search the fund name to see its value. This is useful if you happen to invest in Mutual Fund options or wish to track an ETF.
Yes, NAV is available by 11 p.m. on the same day for most funds. It is based on closing values of assets like stocks or an NPS Scheme, after the market has closed for the day.
Yes, mutual funds are bought and sold at their NAV, calculated daily. Unlike with stocks, this is not influenced by demand, what affects them is only asset value minus liabilities.
NAV is the per-unit value of a fund, listed as a number (e.g., ₹50). It shows what one unit is worth, aiding decisions to when one is looking to invest in Mutual Fund options.
A high NAV doesn’t indicate quality. It reflects asset growth (such as when investing in Bonds, stocks, etc), as opposed to performance. If you wish to check returns instead of NAV for more clarity, this is possible using a Lumpsum Calculator.
High NAV doesn’t determine a fund’s suitability. There are other factors as well which come into play when you invest in Mutual Fund options, such as returns, risks, and goals, and not just NAV height.
Neither high nor low NAV is inherently better. It’s just a unit price. Many investors agree that performance matters more, and it is widely advised to use a SIP Calculator to plan before you invest in Mutual Fund choices available to you.
There’s no good NAV amount as such, because such a thing is relative to the investor. It’s a calculation of assets (like an ETF or NPS Scheme) minus liabilities. Evaluate fund performance, not NAV, for decisions.
A low NAV might mean a newer fund or lower asset value. It doesn’t affect returns. Use a Lumpsum Calculator to assess potential when exploring avenues to invest in Mutual Fund options.
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