Mutual Fund Basics
NAV — Net Asset Value
What NAV means and why a “low NAV” fund is not cheaper.
Updated 27 September 2026 · SEBI rules as of 2026
Formula
(Assets − Liabilities) ÷ Units
Mutual Fund BasicsOverview
NAV is the per-unit value of a scheme: (market value of assets – liabilities) ÷ units outstanding. It is declared every business day. A lower NAV does not mean a fund is cheaper — what matters is the percentage change in NAV.
| Particular | Details |
|---|---|
| Formula | (Assets − Liabilities) ÷ Units |
| Declared | Every business day (AMFI / AMC websites) |
| Direct vs regular | Direct plan NAV is higher due to lower expenses |
Example
| Item | Value |
|---|---|
| Portfolio value | ₹1,000 crore |
| Liabilities | ₹5 crore |
| Units | 40 crore |
| NAV | (1,000 − 5) ÷ 40 = ₹24.875 |
Myths
- “Low NAV = cheap” — wrong; returns depend on % change
- NFO at ₹10 is not a bargain
- Higher NAV in direct plan is normal
Frequently asked questions
Which NAV will I get?
Depends on cut-off time and realisation of funds.
Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Information is educational and may change with SEBI / tax rules — verify with the AMC, AMFI or SEBI. FinancePortal is not an investment adviser.