"Is fund ka NAV sirf Rs.15 hai, doosre ka Rs.300 - yeh sasta hai na?" Most common mutual fund myth. Lower NAV does NOT mean cheaper.
What is NAV?
NAV (Net Asset Value) is the per-unit price of a mutual fund. Market value of all holdings divided by units outstanding.
How is NAV Calculated?
NAV = (Total Assets - Total Liabilities) / Number of Units Outstanding
Example: Rs.100 Cr assets, Rs.1 Cr liabilities, 5 Cr units = NAV Rs.19.80. Updated daily after market close.
The Big Myth: "Low NAV = Cheap Fund"
Wrong. Low NAV only means newer fund or less growth. Not cheaper.
Example: Fund A (NAV Rs.15) and Fund B (NAV Rs.300) both invest in same stocks. Both grow 10% - both give 10% return. No advantage either way.
Why NAVs Differ Between Funds?
- Launch date - older funds had more time
- Performance history
- Dividend payouts reduce NAV
Types of NAV
- Growth Plan NAV - auto-reinvested
- IDCW Plan NAV - reduced on each payout
- Direct Plan NAV - slightly higher
- Regular Plan NAV - slightly lower
When Do You Get Today's NAV?
- Equity: Cutoff 3 PM, same day NAV
- Liquid: Cutoff 1:30 PM
- SIPs: NAV of SIP date
FAQs
Should I buy low NAV fund?
Focus on returns, expense ratio, fund manager. NAV number is irrelevant.
Is falling NAV bad?
If you SIP, you get more units at low NAV. Long-term it averages out.
Check any fund NAV with our NAV Checker.
