NISM Series V-A Formula Sheet
Ten formulas, what each one is for, and a worked example.
Series V-A is mostly concepts and regulation, but a set of calculation questions turns up in almost every paper: NAV, exit loads, returns and SIP units. These ten formulas cover them.
A worked redemption example follows the table.
The 10 Formulas
1
Formula
NAV per unit
Expression
(Market value of assets + Accrued income − Liabilities) ÷ Units outstanding
Use it for
The price at which units are bought and redeemed.
2
Formula
Redemption amount
Expression
Units × NAV × (1 − Exit load %)
Use it for
What the investor receives when an exit load applies.
3
Formula
Units allotted
Expression
Amount invested ÷ NAV
Use it for
Units bought by a lump sum or one SIP instalment. There's no entry load.
4
Formula
Absolute return
Expression
(Current NAV − Purchase NAV) ÷ Purchase NAV × 100
Use it for
Return for holding periods under a year.
5
Formula
Annualised return (CAGR)
Expression
(Ending value ÷ Beginning value)^(1/years) − 1
Use it for
Comparing returns over different periods.
6
Formula
Total return with IDCW
Expression
(Ending NAV − Beginning NAV + IDCW paid) ÷ Beginning NAV × 100
Use it for
Return including income distributions.
7
Formula
Expense ratio
Expression
Total expenses ÷ Average daily net assets × 100
Use it for
Annual cost charged to the scheme.
8
Formula
Portfolio turnover ratio
Expression
Lower of purchases or sales ÷ Average net assets × 100
Use it for
How actively the fund manager trades.
9
Formula
Average cost per unit (SIP)
Expression
Total amount invested ÷ Total units
Use it for
Rupee-cost averaging: lower than the average NAV when NAVs fluctuate.
10
Formula
Capital gain on redemption
Expression
(Redemption NAV − Purchase NAV) × Units
Use it for
Gain on which tax is worked out, unit by unit, first in first out.
| # | Formula | Expression | Use it for |
|---|---|---|---|
| 1 | NAV per unit | (Market value of assets + Accrued income − Liabilities) ÷ Units outstanding | The price at which units are bought and redeemed. |
| 2 | Redemption amount | Units × NAV × (1 − Exit load %) | What the investor receives when an exit load applies. |
| 3 | Units allotted | Amount invested ÷ NAV | Units bought by a lump sum or one SIP instalment. There's no entry load. |
| 4 | Absolute return | (Current NAV − Purchase NAV) ÷ Purchase NAV × 100 | Return for holding periods under a year. |
| 5 | Annualised return (CAGR) | (Ending value ÷ Beginning value)^(1/years) − 1 | Comparing returns over different periods. |
| 6 | Total return with IDCW | (Ending NAV − Beginning NAV + IDCW paid) ÷ Beginning NAV × 100 | Return including income distributions. |
| 7 | Expense ratio | Total expenses ÷ Average daily net assets × 100 | Annual cost charged to the scheme. |
| 8 | Portfolio turnover ratio | Lower of purchases or sales ÷ Average net assets × 100 | How actively the fund manager trades. |
| 9 | Average cost per unit (SIP) | Total amount invested ÷ Total units | Rupee-cost averaging: lower than the average NAV when NAVs fluctuate. |
| 10 | Capital gain on redemption | (Redemption NAV − Purchase NAV) × Units | Gain on which tax is worked out, unit by unit, first in first out. |
Worked Example: Redemption With an Exit Load
An investor redeems 1,000 units at a NAV of ₹52.40. The scheme has a 1% exit load.
- 1
Gross value
1,000 × 52.40 = ₹52,400.
- 2
Exit load
1% of 52,400 = ₹524.
- 3
Amount paid
52,400 − 524 = ₹51,876.
Free account, this exam preselected.
Use CAGR Only for a Year or More
For a holding period under a year, quote the absolute return. Annualising a short-period return can overstate it badly. Exam options often test which measure applies.
FAQs
Is there an entry load on mutual funds?expand_more
No. SEBI abolished entry loads in 2009. Only exit loads can apply.
Does an exit load change the NAV?expand_more
No. The load is deducted from the amount paid out, and since 2012 it is credited back to the scheme.
Why is the SIP average cost lower than the average NAV?expand_more
Because a fixed amount buys more units when the NAV is low and fewer when it's high. This is rupee-cost averaging.
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