ET Explainer: NAV of a mutual fund
mutual fund scheme declares its net asset value (NAV) at the end of each working day. The NAV is updated daily at 11 pm for all schemes, except for fund of funds, which are updated at 10 am the next day and displayed on websites of the fund house, AMFI, and investment platforms.
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What is NAV? The NAV represents a fund’s per unit market value. This is the price at which investors are allotted units by the fund house or the price at which they can sell it back to the fund house. This is calculated by dividing the total value of all the assets in a portfolio, minus all its liabilities. The NAV is calculated by the fund house or by an accounting firm hired for the purpose.
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View Details» <div data-placement=«Mid Article Thumbnails» data-target_type=«mix» data-mode=«thumbnails-mid» style=«min-height:400px; margin-bottom:12px;» class=«wdt-taboola» id=«taboola-mid-article-thumbnails-110927585»>When is the scheme's NAV calculated? The NAV is calculated and declared after market closing hours at the end of the day. Since stock prices move up and down every second, it is difficult to calculate NAV during market hours as the price of the underlying stocks in the portfolio could change. Hence, the NAV is calculated at the end of every market day, after factoring in the closing market prices of the securities that the fund holds.
What is the applicabiulity of a day's NAV? Investors are allocated units in a scheme after a
