NAV stands for Net Asset Value, it is the value of an entity’s assets less the value of its liabilities. Here an entity is a particular fund house and the NAV is for a particular scheme say a index or an infra fund.
The formula which is used to calculate NAV is:
Net Asset Value of a mutual fund (MF) = Total assets managed – Total liabilities.
Net Asset Value per unit (of MF) = Net asset value / total outstanding shares (or) units.
Relevance to Mutual Fund investments:
Now when you invest in a mutual fund you get units of share which is proportionality to the market value of the fund. For an example – when you invest Rs 5000/- lumpsum in a particular fund and that fund’s NAV is currently at Rs 20/- per unit you get 250 units in your account and when the value of NAV rises you make money.
So an investor has to keep a track on NAV to know the change in his wealth/net worth.
Where can an investor find information about current NAV?
- Current NAV can be found on AMFI’s website here.
- Can be found on a particular fund houses website. Ex – You have invested in HDFC’s fund then you can find out a particular NAV on their website.
- Your fund house send’s you reports every week, month, etc. when every you have desired to receive it.
- A simple option among all this can be to register on a free portfolio management website and create your own portfolio and this is how you can keep a track of your wealth all at one place. A few example of free online portfolio management tools are – MoneyControl, EconomicTimes, etc.
- There are many mobile apps which also allow you to keep a track of it. Like the MoneyControl mobile app.
This blog post has been reproduced from squamble.com