What are NAV in Mutual Funds – Importance of NAV in Mutual Fund

What are NAV in Mutual Funds – Importance of NAV in Mutual Fund

Friends, if you do not know about the NAV, what are NAV in  mutual funds, then today in this article, I will tell you what is the means of NAV in the mutual fund.

And what is its importance in the mutual fund? If you want to know about the NAV, then you must read this post completely.


What are NAV in Mutual Funds

NAV means Net Asset Value. This is the price of 1 unit of a mutual fund.

NAV is the book value of a unit of any mutual fund.

An investor uses this value to buy or sell a unit of a mutual fund.

It is calculated at the end of the day after the market is closed.

Just as shares in the stock market are bought and sold in rupees, similarly any fund in the mutual fund is bought and sold according to the NAV.

Whenever you invest in a mutual fund and buy some units of any mutual fund, you will get those units according to the NAV rate of that day.

The NAV is decided by the AMC (Asset Management Company) at the end of business every day.

The base value of NAV in Mutual Fund is Rs 10 or Rs 100.

The value of NAV in a mutual fund fluctuates according to market fluctuations at the end of trading every day.

Also Read This :- Units in Mutual Fund – What are the Mutual Fund Units


Importance of NAV

As you also know, the NAV is a unit of growth of any mutual fund.

NAV is an indicator. Which shows the performance growth of the mutual fund.

By looking at the NAV of a mutual fund, you can find out how the growth of mutual fund is.

If you invest in a fund at Rs 12 per unit NAV and after one year if the NAV of that unit becomes Rs 15 per unit, then that fund has grown by 25%.

The assumption is wrong that mutual funds with low NAV will give good returns and a fund with high NAV will give low returns.

You can tell by looking at the past NAV of a fund how the fund has given returns in the past, but looking at the NAV, it cannot be told how the fund will return in future.

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