What is Net Asset Value (NAV)?
Net Asset Value (NAV) is the value of each unit of a mutual fund. It represents the market value of the fund's assets minus its liabilities, divided by the number of units outstanding. The NAV is calculated on a daily basis and is the price at which investors can buy or sell units of the mutual fund.
The NAV of a mutual fund changes every day based on the performance of the underlying assets held by the fund. If the value of the assets increases, the NAV of the mutual fund will also increase. Conversely, if the value of the assets decreases, the NAV of the mutual fund will also decrease.
Investors use the NAV to determine the value of their investment in the mutual fund. They can buy or sell units of the mutual fund based on the NAV. If an investor wants to buy units of the mutual fund, they will pay the current NAV per unit. If an investor wants to sell units of the mutual fund, they will receive the current NAV per unit.
It's important to note that the NAV is not a measure of the performance of the mutual fund. It only represents the value of the underlying assets held by the fund. The performance of the mutual fund is measured by the returns generated by the fund over a specific period.
