What is NAV in a mutual fund?

NAV (Net Asset Value) is simply the per-unit price of a mutual fund. When you invest, you buy units at the applicable NAV; when you redeem, you sell them at the applicable NAV. It sounds technical, but the idea is easy — and one big misconception about it costs beginners dearly.

How NAV is calculated

NAV = (Total assets − Total liabilities) ÷ Units outstanding

The fund adds up the market value of everything it holds, subtracts its liabilities and expenses, and divides by the number of units. For most open-ended funds this is done once every business day after markets close — which is why your fund value updates daily.

The big myth: "low NAV = cheaper = better"

This is wrong, and it's worth being clear about. A fund with a NAV of ₹10 is not cheaper or better than one with a NAV of ₹100. If both rise 10%, you earn exactly 10% either way — you just hold more units of the low-NAV fund, each worth less. NAV tells you nothing about future returns. Judge a fund by its strategy, track record, risk and cost — never by its NAV number.

Cut-off times: which NAV you get

SEBI sets cut-off times that decide the applicable NAV for your transaction. In general, if your valid application with realised funds is received before the cut-off on a business day, you get that day's NAV; after the cut-off, you get the next business day's NAV. The exact cut-offs vary by scheme type.

NAV vs market price (ETFs)

Regular open-ended funds transact at NAV. ETFs are different — they trade on the exchange, so their market price can differ slightly from NAV through the day based on supply and demand. See index funds vs active funds for where ETFs fit.

Keep learning

• XIRR vs CAGR — how returns are actually measured
• Equity vs debt funds · MF taxation
• How to start investing · Live NAV data

Frequently asked questions

What is NAV in a mutual fund?

NAV (Net Asset Value) is the per-unit value of a mutual fund. It is the total value of the fund's assets minus its liabilities, divided by the number of units outstanding. When you invest, you buy units at the applicable NAV; when you redeem, you sell them at the applicable NAV.

Is a lower NAV better than a higher NAV?

No — this is a common myth. NAV only reflects the per-unit price, not whether a fund is cheap or expensive. A fund with a NAV of ₹10 and one with ₹100 can deliver exactly the same percentage return. What matters is the fund's performance, strategy and cost, not the NAV number.

How is NAV calculated?

NAV = (Total assets − Total liabilities) ÷ Number of units outstanding. For most open-ended mutual funds it is calculated once each business day after markets close, based on the closing prices of the underlying securities.

At what NAV will my purchase be processed?

It depends on the fund type and when your money is received, under SEBI's cut-off time rules. Generally, for applications (with realised funds) received before the cut-off time on a business day, that day's NAV applies; after the cut-off, the next business day's NAV applies.

Does NAV change every day?

Yes, for most open-ended funds the NAV is updated each business day because the value of the underlying holdings changes with the market. This daily NAV is what your statement uses to value your investment.

For education only — not investment advice. Mutual fund investments are subject to market risks; read all scheme-related documents carefully. See our disclaimer.