What is Net Asset Value (NAV) of a scheme?
Performance of a mutual fund scheme is denoted by Net Asset Value (NAV).
Mutual fund schemes invest money collected from investors in securities markets. In simple words, Net Asset Value is the market value of the underlying securities held by the mutual fund scheme. As market value of securities changes every day, NAV of a scheme also changes on day to day basis. The NAV per unit of mutual fund is the market value of securities of a scheme divided by the total number of units of a scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs. 500 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs. 50. NAV is required to be disclosed by the mutual funds on a regular basis – daily or weekly – depending on the type of scheme.