What is NAV? How to interpret NAV of a Mutual Fund? Let's see with the help of an Example and Video. READ & WATCH to know more...
NAV stands for Net Asset Value. NAV is the price of a single unit of a particular Mutual Fund. In this post, we'll see How we should interpret NAV of a Mutual Fund and Everything that we are supposed to know about NAV.
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NAV stands for Net Asset Value. It is basically the price of a single unit of a particular Mutual Fund. In simple terms, it is the difference between the Total Assets and Total Liabilities of a Mutual Fund.
NAV is something at which you Buy or Sell your Mutual Funds Units.
Example Buy:
Let's say NAV of Mutual Fund A = 10.
If you invest Rs. 10,000 you are buying 1000 units of Mutual Fund A.
Example Sell:
After 1 year, if you wish to sell units of Mutual Fund A, and if NAV is 15, which means:
1000 Units * 15 = Rs. 15,000
That means you made 50% (Rs.5000) profit on your investment after 1 year. (Example is just for illustration purpose).
NAV is something at which you Buy or Sell your Mutual Funds Units.
Example Buy:
Let's say NAV of Mutual Fund A = 10.
If you invest Rs. 10,000 you are buying 1000 units of Mutual Fund A.
Example Sell:
After 1 year, if you wish to sell units of Mutual Fund A, and if NAV is 15, which means:
1000 Units * 15 = Rs. 15,000
That means you made 50% (Rs.5000) profit on your investment after 1 year. (Example is just for illustration purpose).
When is NAV Calculated?
NAV of a Mutual Fund is typically calculated at the end of the Market Day (Market Days: Monday to Friday). It is impossible to calculate NAV during day time because of the increase or decrease of the price of underlying Stocks, Stocks that are currently selected by the Mutual Fund Manager in a particular Mutual Fund.
So, NAV is calculated at the end of each Market Day by AMC (Asset Management Company). You needn't have to worry about NAV calculation (moreover, it is not in your control).
So, NAV is calculated at the end of each Market Day by AMC (Asset Management Company). You needn't have to worry about NAV calculation (moreover, it is not in your control).
Watch this VIDEO containing Definition & Example of Interpretation of NAV:
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