The per-unit value of a mutual fund scheme, worked out from the market value of its holdings after expenses and published each business day.
Net Asset Value is the price of one unit of a mutual fund scheme. The fund adds up the market value of everything it holds — shares, bonds, cash — subtracts liabilities and accrued expenses, and divides by the number of units outstanding. When you invest, you receive units at the applicable NAV; when you redeem, the fund buys them back at the applicable NAV.
Why it matters
NAV tells you what each unit you own is worth on a given day. Multiply your units by the latest NAV and you have the current value of your holding. The change in NAV over time, adjusted for any payouts, is how a scheme’s returns are measured.
How to read it
- Compare NAV movement over time within the same scheme and plan, not the NAV level across schemes.
- The direct and regular plans of one scheme have different NAVs, because their expenses differ.
- Open-ended schemes publish NAVs every business day. Which day’s NAV you get depends on when your money or request reaches the fund relative to its cut-off time.
Common misconceptions
- “A low NAV is cheap.” A scheme at ₹15 is not cheaper than one at ₹150. A lower NAV buys more units, but each unit moves by the same percentage as the portfolio. What matters is how the underlying holdings perform.
- “The NAV fell after a payout, so I lost money.” When a scheme pays out under an IDCW option, the NAV drops by roughly the amount paid. The value has moved from the fund to your bank account.
In India: Fund houses publish NAVs on their websites, and AMFI publishes them for the whole industry. CompoundX does not show live NAVs; check the fund house or AMFI for current values.
Formula
NAV per unit = (Market value of investments + Cash and receivables − Liabilities and accrued expenses) ÷ Number of units outstanding
Worked example
For illustration, assume a scheme holds investments worth ₹100 crore and ₹2 crore in cash, owes ₹1 crore in expenses and other liabilities, and has 5 crore units outstanding. NAV = (100 + 2 − 1) crore ÷ 5 crore units = ₹20.20 per unit.
Figures are for illustration only — not a forecast or a recommendation.
Related terms
AUM
Assets Under Management
The total market value of investments a scheme or fund house manages on behalf of investors at a point in time.
Expense ratio
The yearly cost of running a mutual fund scheme, shown as a percentage of its assets and deducted from the scheme before NAV is published.
IDCW
Income Distribution cum Capital Withdrawal
A mutual fund option that pays out distributions from time to time; payouts can include part of your own capital, not just income.
Growth option
A mutual fund option that keeps all gains invested in the scheme instead of paying them out, so returns show up entirely in the NAV.
Direct plan
The version of a mutual fund scheme bought directly from the fund house, with no distributor commission and so a lower expense ratio.
Regular plan
The version of a mutual fund scheme bought through a distributor; its expense ratio includes the distributor’s commission.