What is NAV in Mutual Funds? Everything You Need to Know

NAV stands for Net Asset Value. It is the price of one unit of a mutual fund on a given day. When you invest in a mutual fund, you buy units — and NAV is the price you pay per unit.

For example, if a fund has a NAV of Rs 50 and you invest Rs 5,000, you get 100 units (5,000 / 50 = 100). If the NAV rises to Rs 60 next year, your 100 units are now worth Rs 6,000 — a 20% gain.

NAV is calculated at the end of every market trading day (after 3:30 PM IST) using this formula: NAV = (Total Assets of the Fund - Liabilities) / Number of Units Outstanding.

Total assets include the current market value of all stocks, bonds, and cash held by the fund. Liabilities include fund expenses (management fees, administrative costs). This is why NAV changes every day — it reflects the latest market value of the fund portfolio.

AMFI (Association of Mutual Funds in India) publishes NAV for all mutual funds daily at amfiindia.com. Our Fund pages pull this data from mfapi.in, which aggregates AMFI data.

This is one of the most common misconceptions in mutual fund investing. The answer is no — a lower NAV does not mean the fund is cheaper or a better buy.

Here is why: Fund A has a NAV of Rs 10 and Fund B has a NAV of Rs 500. Both invest in the same stocks. If you invest Rs 10,000 in each: Fund A gives you 1,000 units, Fund B gives you 20 units. If both funds grow by 15%, Fund A is now worth Rs 11,500 (1,000 x 11.5) and Fund B is also worth Rs 11,500 (20 x 575). The return is identical.

What matters is the percentage growth in NAV — not the absolute NAV number. A fund with NAV Rs 500 that has grown from Rs 50 over 10 years has delivered 10x returns — far better than a new fund with NAV Rs 10 that launched last month.

Track NAV growth over time, not just the current value. A fund whose NAV has grown consistently from Rs 20 to Rs 200 over 10 years has delivered 10x — that is what you want to see.

Use NAV history to calculate actual CAGR. If a fund NAV was Rs 50 five years ago and is now Rs 85, the CAGR is approximately 11.2%. Our CAGR Calculator can do this instantly.

For SIP investors, NAV on the purchase date determines how many units you receive. Over time, your average purchase NAV will smooth out — this is the rupee cost averaging benefit of SIP.

NAV and stock prices both represent per-unit values, but they are very different in practice. Stock prices are set by market supply and demand every second during trading hours. NAV is calculated once per day after markets close, based on the actual value of the fund portfolio.

You cannot buy a mutual fund at yesterday's NAV after the market has moved. Your SIP purchase gets the NAV calculated at end of day when the transaction is processed — typically same-day NAV if placed before 3 PM, next-day NAV if after.