What is Net Asset Value (NAV)?

Q: Does a lower NAV mean a cheaper or better fund?

No. NAV alone does not determine value. A fund with NAV ₹10 and a fund with NAV ₹100 can have identical portfolios if they started at different times. What matters is portfolio quality and returns, not the NAV level.

Q: Is NAV the same as share price?

NAV is similar in concept to share price (it's the per-unit value), but unlike shares, mutual fund units are bought and sold at the NAV directly from the AMC, not on an exchange (for open-ended funds).

Formula

NAV = (Total Assets - Total Liabilities) / Total Outstanding Units

NAV (Net Asset Value) is the per-unit price of a mutual fund scheme. It represents the fair value at which investors buy (subscription) and sell (redemption) units, and is declared daily by all open-ended mutual fund schemes.

NAV Calculation

NAV is calculated at the end of every business day, based on the closing market prices of the portfolio securities.

Cut-off Times (SEBI Regulations)

Liquid/Overnight Funds: 1:30 PM for same-day NAV
Other Debt Funds: 3:00 PM for same-day NAV (for amounts < ₹2 lakh)
Equity/Hybrid Funds: 3:00 PM for same-day NAV (for amounts < ₹2 lakh)
Large transactions (≥ ₹2 lakh): Next business day's NAV applies

NAV changes daily as the underlying portfolio value changes. A rising NAV reflects portfolio appreciation; falling NAV reflects decline.

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Example

A mutual fund scheme has total assets worth ₹500 crore and liabilities of ₹5 crore. Total outstanding units = 4.95 crore. NAV = (500 - 5) / 4.95 = ₹100 per unit.

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Relevant NISM series

Series V-ASeries V-C

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FAQs about Net Asset Value (NAV)

Does a lower NAV mean a cheaper or better fund?add

No. NAV alone does not determine value. A fund with NAV ₹10 and a fund with NAV ₹100 can have identical portfolios if they started at different times. What matters is portfolio quality and returns, not the NAV level.

Is NAV the same as share price?add

NAV is similar in concept to share price (it's the per-unit value), but unlike shares, mutual fund units are bought and sold at the NAV directly from the AMC, not on an exchange (for open-ended funds).

Formula

NAV = (Total Assets - Total Liabilities) / Total Outstanding Units

NAV Calculation

NAV is calculated at the end of every business day, based on the closing market prices of the portfolio securities.

Cut-off Times (SEBI Regulations)

Liquid/Overnight Funds: 1:30 PM for same-day NAV
Other Debt Funds: 3:00 PM for same-day NAV (for amounts < ₹2 lakh)
Equity/Hybrid Funds: 3:00 PM for same-day NAV (for amounts < ₹2 lakh)
Large transactions (≥ ₹2 lakh): Next business day's NAV applies

NAV changes daily as the underlying portfolio value changes. A rising NAV reflects portfolio appreciation; falling NAV reflects decline.

lightbulb

Example

A mutual fund scheme has total assets worth ₹500 crore and liabilities of ₹5 crore. Total outstanding units = 4.95 crore. NAV = (500 - 5) / 4.95 = ₹100 per unit.

info

Relevant NISM series

Series V-ASeries V-C

See Net Asset Value (NAV) in exam questions

1,200+ NISM practice questions. Free to start.

Start Practice Free

NAV Calculation

Cut-off Times (SEBI Regulations)

Related Terms

AUM

Exit Load

Expense Ratio

Units

Redemption

FAQs about Net Asset Value (NAV)

Where to go from here

Master every term that matters

What is Net Asset Value (NAV)?

NAV Calculation

Cut-off Times (SEBI Regulations)

Related Terms

AUM

Exit Load

Expense Ratio

Units

Redemption

FAQs about Net Asset Value (NAV)

Where to go from here

Master every term that matters