NAV (Net Asset Value) of a mutual fund shows the price of one unit of the fund. It helps investors know the current value of their investment. NAV changes daily based on market performance of the fund’s assets.

What Is NAV in a Mutual Fund?

NAV stands for Net Asset Value. It is the price of each unit of a mutual fund. It is calculated by dividing the total value of the fund’s assets (like stocks, bonds) minus liabilities, by the number of units. NAV is updated daily and reflects the latest market value of the fund’s portfolio.

Why Is NAV Important for Investors?

NAV helps investors know how much one unit of a mutual fund is worth. It also helps track the performance of your investment over time. A rising NAV shows your investment is growing. But a low NAV doesn't always mean a fund is cheap or bad. What matters more is how the fund performs overall.

Does a Lower NAV Mean a Cheaper Fund?

No, a lower NAV does not mean the fund is cheaper or better. NAV just shows the per-unit price. A fund with NAV ₹10 and another with NAV ₹100 can give the same returns. What matters is the fund’s return percentage, not the NAV amount. So, always look at past performance and fund quality, not just NAV.

How Often Does NAV Change?

NAV changes every business day. After the stock market closes, mutual fund companies calculate the new NAV based on that day’s market value of the fund’s investments. So, when you invest in a mutual fund, you get the units based on the NAV of that day (or next working day if after cutoff time).

How Does NAV Affect Mutual Fund Returns?

Your return from a mutual fund depends on how much the NAV increases from the time you buy to the time you sell. For example, if you buy a unit at ₹20 NAV and sell at ₹30 NAV, your return is 50%. So, returns depend on NAV growth, not just the number itself.

How to Use NAV for Smart Investing?

Use NAV to track the progress of your mutual fund investment. But don’t make decisions based only on NAV. Check other things like fund performance, manager experience, expense ratio, and your own goals. A fund with strong past returns and growth in NAV is a better pick than one with just a low NAV.