When looking at the performance of a mutual fund, we firstly look at the NAV of that mutual fund.
NAV meaning in mutual fund is the net market value of the securities in that particular fund. It must be noted that the NAV of a mutual fund keeps changing since the market value of securities changes as well.
What’s in this post: All about net asset value along the high NAV mutual funds and more.
How is NAV Calculated?
NAV full form: Net Asset Value
NAV of a mutual fund is determined on a daily basis because mutual funds are bought and sold on a daily basis. It is calculated on closing price of all the securities owned by a particular MF scheme.
NAV= (Total Asset Value— Expense Ratio) / Number of Outstanding units
The above NAV formula is used to determine the NAV of a mutual fund.
Why is NAV important for me?
As an investor, NAV for you carries limited importance. That is, it will determine the total number of units that will be allotted to you when you invest in a mutual fund. If the NAV of a mutual fund is Rs 100 and you are investing Rs 1 lakh, you will get 1 thousand units of that mutual fund. Similarly, if the NAV is Rs 10, you will get 10,000 units.
That’s the role an NAV plays for you, as an investor.
Is NAV an indicator of Mutual Fund performance?
No. NAV or the Net Asset Value is one of the many aspects of a mutual fund and in no case should be assumed as the sole indicator of the performance of a mutual fund.
You should consider historical performance of the mutual fund as well as its rating and expense ratio when investing. You want to look for high rating and low total expense ratio.
Word to Remember
Total Expense Ratio: TER or Total Expense Ratio is the total cost of running and managing a mutual fund. It is the amount you pay to the fund to manage the money you invested in it.
A higher ratio will indicate lower returns because it is deducted from the total revenue of the mutual fund. After deducting this, profits are disbursed among investors. Thus, we are always looking for low TER.
Benefits of Mutual Fund Investment
- Investment Diversification: Mutual funds invest in various asset classes, thus making them diverse in terms of investments.
- Liquidity: Mutual funds allow you to sell your funds within a short period. It proves helpful if you are looking for short-term investments.
- Professional Management: Mutual funds are managed by fund managers who are professionals in managing the funds. These professionals constantly manage the fund’s portfolio.
Latest Mutual Funds NAVs
The following table shows a list of the latest mutual fund NAVs:
|Fund name||Doubled in||NAV||1D change||NAV date|
|SBI Magnum Income Fund Medium to Long Duration||8 yrs 2 m||₹59.3||-0.09%||May 20, 2022|
|Aditya Birla Sun Life Medium Term Fund Medium Duration||9 yrs||₹27.92||0.06%||May 20, 2022|
|Axis Midcap Fund Mid Cap||2 yrs 1 m||₹68.75||1.34%||May 20, 2022|
|Mirae Asset Equity Savings Fund Equity Savings||–||₹14.7||0.91%||May 20, 2022|
|Quant Focused Fund Focused||2 yrs||₹55.64||3.25%||May 20, 2022|
|Aditya Birla Sun Life Short Term Fund Short Duration||8 yrs 4 m||₹40.39||0%||May 20, 2022|
|Quant Multi Asset Fund Multi Asset Allocation||1 yrs 9 m||₹80.31||2.56%||May 20, 2022|
|Quant Tax Plan ELSS||1 yrs 7 m||₹233.57||3.15%||May 20, 2022|
|Edelweiss Large & Mid Cap Fund Large & MidCap||2 yrs 1 m||₹53.71||2.41%||May 20, 2022|
|Mirae Asset Tax Saver Fund ELSS||1 yrs 11 m||₹31.34||2.33%||May 20, 2022|
|Sundaram Equity Savings Fund Equity Savings||7 yrs 7 m||₹53.9||0.88%||May 20, 2022|
|Axis Ultra Short Term Fund Ultra Short Duration||–||₹12.5||0.01%||May 20, 2022|
|IDFC Banking & PSU Debt Fund Banking and PSU||9 yrs 1 m||₹20.31||0%||May 20, 2022|
|Axis Growth Opportunities Fund Large & MidCap||2 yrs 1 m||₹19.32||0.84%||May 20, 2022|
|SBI Banking & Financial Services Fund Sectoral-Banking||5 yrs 3 m||₹24.1||2.19%||May 20, 2022|
The net asset value is the market price of the mutual fund unit held by an individual. The total cost of the mutual fund depends on the market value per fund unit.
The net asset value of an SIP is the difference between the fund’s total assets and liabilities, divided by the total shares.
As the NAV of a fund is just the price of a mutual fund unit, it is not tied to its performance.
No, low mutual fund NAV need not give better returns than high mutual fund NAV. The returns depend on the portfolio’s worth and fund management.