What is NAV in Mutual Funds?
The value of every mutual fund unit is known as its NAV. It is computed once daily, that is, at the end of every trading day.
NAV aids investors in determining the actual worth of their holdings. Another function of mutual fund NAVs is to set the price at which investors can purchase (bid price) or redeem (redemption price) units from the fund company.
The net asset value (NAV) of a fund is computed by dividing its total cash and securities worth (less any liabilities) by the number of outstanding shares. This procedure guarantees that the fund’s financial condition is accurately reflected.
Why is NAV Important in Mutual Funds?
Knowing net asset value, which is similar to a mutual fund’s heartbeat, can assist you as an investor make wiser choices. Put yourself in the position of a mutual fund food store. The assets of the fund are the total worth of all the products in your basket. The cost of every item in your cart is known as NAV.
Why is it important now? You can determine whether the things (fund assets) are getting more or less valuable by routinely checking the price tags (NAV). Similar to understanding if foods are growing cheaper or more expensive. Additionally, NAV assists you in monitoring the effectiveness of your entire investment, or shopping cart.
The NAV per unit rises in proportion to the overall value of the fund assets, or groceries. But keep in mind that profit isn’t guaranteed until those groceries (units) are sold at the appropriate moment. Nevertheless, a lot of investors consider the quantity of units to be a more accurate indicator of mutual fund value than NAV. In relation to basket, Dhan offers a great tool for investing in mutual funds online called Basket!
High NAV Mutual Funds in India
A mutual fund’s net asset value (NAV) is determined by the way its underlying assets perform, the state of the market, and the costs the fund incurs.
A high NAV does not necessarily mean that an investment is profitable. It’s a relative metric determined by the fund’s size and performance. In India, a few of the high NAV mutual funds include:
| Fund Name | NAV (Rs.) |
| Nippon India Growth Fund | 3,392.66 |
| Franklin India Prima Fund | 2,333.85 |
| HDFC Flexi Cap Fund | 1,715.89 |
| Aditya Birla Sun Life Equity Hybrid ’95 Fund | 1,430.66 |
| HDFC Tax Saver Fund | 1,228.53 |