Net Asset Value (NAV) is an important concept in the mutual fund industry. It represents the per-unit value of a mutual fund and the price at which investors buy or sell each unit in a mutual fund.
NAV is updated at the end of each day. NAV is crucial as it helps track the performance of a mutual fund. Investors can assess how well the fund has performed by comparing the NAV over different periods. Regular calculation and publication of NAV provide transparency to investors regarding the value of their investments.
To calculate NAV, you need to subtract the fund's liabilities from its total asset value and divide it by the total outstanding units of the fund.
Net Value of an Asset = (Total Asset – Total Liabilities) / Total Outstanding units of the fund
