What is NAV in Mutual Funds?

NAV stands for Net Asset Value. It represents the per-unit value of a mutual fund scheme.

How is NAV Calculated?

NAV is broadly calculated by taking the value of the scheme's assets, subtracting its liabilities and expenses, and dividing the result by the number of outstanding units.

Simple Example

If a mutual fund has net assets worth ₹10 crore and 1 crore units, the NAV would be ₹10 per unit.

Does a Lower NAV Mean a Better Fund?

No. A lower NAV does not automatically mean that a mutual fund is cheaper or better than another fund.

Conclusion

NAV is an important number for understanding the value of mutual fund units, but it should not be the only factor used when selecting a mutual fund.