In simplest term, NAV or mutual fund NAV is the price of a unit of a mutual fund scheme. If you invest in a mutual fund scheme, units will be allotted to you based on the NAV of the scheme on the day, when the transaction takes place. Similarly, if you sell your mutual fund units, the sale value will depend on the NAV of the scheme on the day, when the transaction takes place.
How is NAV calculated?
The NAV is calculated by dividing the market value of net assets of the mutual fund scheme by the total number of units outstanding. The asset of a mutual fund scheme is the market value of the securities and the cash in the scheme portfolio. Net asset value is the value of scheme assets minus the expenses (TER) and liabilities. Mutual fund NAV is calculated based of the closing prices of the scheme portfolio securities at the end of each business day and disclosed by the Asset Management Company.
Where can you find mutual fund NAVs online?
Asset Management Companies (AMCs) display current NAVs of all their mutual fund schemes on their online portals (websites). You can also get the historical NAVs on the AMC portals or also on www.amfindia.com website.
You can also get the current and historical NAVs on the portals of the Registrar and Transfer Agents (RTAs). Investors should note that any one RTA does not service all the AMCs. If you go to the RTA website, you will find information (including NAVs) pertaining to the AMCs serviced by the RTA. You can check with your financial advisor to find out the RTA of your mutual fund scheme.
You will get current and historical NAVs of mutual funds India on the online portal of Association of Mutual Funds in India (AMFI).
You can get NAVs of mutual fund schemes on different business / financial news portals and third party Mutual Fund research portals.
Points to note about MF NAVs
At the time of New Fund Offer (NFO), mutual fund units are priced at par value. Mutual funds in India are usually priced at par value of Rs 10 per unit at the time of NFO. After the NFO, NAVs will change depending on the market prices of the securities in the scheme.
NAV of a scheme, by itself, is not an indicator of performance. The percentage change in NAVs of a scheme over a period of time expressed in compounded annual growth rate (CAGR) is a measure of the scheme’s performance.
Dividends (IDCW) are paid from the cum-dividend NAV of the scheme. Once a scheme pays dividend, the NAV (ex dividend NAV) of the scheme goes down.
TERs are included in the mutual fund NAV of schemes; you do not have to adjust for TERs separately, to calculate scheme returns.
Direct and Regular Plans have different NAV. You should refer to the correct NAV based on which Plan you have selected.
Growth and IDCW Options have different NAVs. You should refer to the correct NAV based on which Option you have selected.
If you redeem within the exit load period, the exit load will be deducted from your redemption NAV based on the exit load structure of the scheme (as specified in the SID).