NAV (Net Asset Value) is the most misunderstood concept for new mutual fund investors. Many think lower NAV = cheaper fund = better buy. This is completely wrong. Here's the truth.
NAV = (Total assets of the fund − Liabilities) ÷ Number of units outstanding
Simply put: NAV is the current price per unit of a mutual fund. If a fund has ₹1,000 Crore in assets and 10 Crore units, NAV = ₹100.
Every trading day at 4:30 PM, all stocks in the fund are valued at closing prices. The total portfolio value is calculated, divided by total units, and NAV is updated. SIP investments get units at the next day's NAV.
WRONG! A fund with NAV ₹10 is not cheaper than a fund with NAV ₹500. Here's why:
Fund A: NAV ₹10. You invest ₹10,000 → get 1,000 units. If NAV rises 10% → NAV = ₹11. Your value = ₹11,000.
Fund B: NAV ₹500. You invest ₹10,000 → get 20 units. If NAV rises 10% → NAV = ₹550. Your value = ₹11,000.
Same result! NAV level doesn't matter — only the % growth matters.
Use our free calculators to see exactly how your money grows.
Disclaimer: This article is for educational purposes only. Not investment advice. Contact: myself@sipcalculators.in