NAV
Net Asset Value, or NAV, is the per-unit market value of a mutual fund scheme on any given day. It is calculated by taking the total market value of the scheme’s assets, subtracting its liabilities, and dividing by the number of outstanding units. Every Indian mutual fund publishes a daily NAV after market close. This is the price at which you buy and sell units.
Key takeaways:
- NAV is the per-unit value of a mutual fund scheme.
- Calculated as (Total assets − Total liabilities) / Number of outstanding units.
- Published once per business day, after market close.
- Lower NAV does not mean a cheaper or better fund.
- Returns are determined by NAV growth, not NAV level.
How NAV is calculated
At the end of each business day:
- The fund values all its holdings — stocks, bonds, cash — at end-of-day market prices.
- Subtracts all liabilities — outstanding management fees, redemptions due, expenses.
- Divides the net assets by the total number of units issued.
- Publishes the result as NAV by 11 p.m. on the same business day.
Why NAV level does not matter
A fund at NAV ₹10 is not cheaper or better than one at NAV ₹500. Returns come from the percentage change in NAV, not the level. A 10% rally takes ₹10 to ₹11 and ₹500 to ₹550 — both have grown 10%. Many beginners wrongly chase low-NAV new-fund offers; this is a misunderstanding.
NAV vs market price (for ETFs)
Open-ended mutual funds buy and sell only at NAV. Exchange-traded funds (ETFs) trade on the exchange like stocks — their price can deviate slightly from NAV due to demand and supply during the day. The day-end NAV provides a reference; the live price reflects intraday fair value.
NAV applied to your transactions
| Order placed | NAV applied |
|---|---|
| Equity scheme before 3:00 p.m. cut-off | Same day’s NAV |
| Equity scheme after 3:00 p.m. cut-off | Next business day’s NAV |
| Liquid funds before 1:30 p.m. cut-off | Previous day’s NAV (subject to fund clearing) |
| Holidays | Next business day’s NAV |
Common NAV-related questions
- Why does the NAV not match my screen at the time I bought? Because NAV applies based on the cut-off rule, not the exact time of order.
- Does NAV include dividends? Yes — when a fund pays dividend, NAV drops by the dividend amount.
- What is the difference between growth and IDCW NAVs? Growth plans accumulate gains; IDCW plans distribute income, leading to lower NAV over time.
How NAV affects your decisions
Focus on the fund’s long-term return, expense ratio, and portfolio quality — not its NAV level. Use SIP installments to average across NAV fluctuations. Track the fund’s rolling returns rather than absolute NAV growth.
Frequently asked questions
When is NAV updated?
Daily by 11 p.m. for most equity funds; earlier for liquid funds.
Is a low NAV a sign of a cheaper fund?
No. NAV level is irrelevant; only growth in NAV affects your returns.
How are taxes calculated on NAV?
Taxes apply to the difference between sale NAV and purchase NAV (capital gains).
Does Lemonn show real-time NAVs?
NAVs are official end-of-day prices; Lemonn shows the latest published NAV alongside historical performance.
