ARTICLE OVERVIEW
What this article covers:
- What NAV actually is — in an easy way
- How NAV is calculated with a real formula + example
- The biggest NAV myth that most beginners fall for (low NAV = cheap fund)
- Why two funds with very different NAVs can give the same returns
- What you should actually look at instead of NAV when choosing a fund
When you start investing in mutual funds, one of the first numbers you’ll notice is NAV. And almost every new investor at some point asks the same question: “Should I pick the fund with a lower NAV? Sounds cheaper, right?” It sounds logical. But this is one of the most common mutual fund myths in India, and it costs people some genuinely good investment decisions. What is NAV in mutual fund, and does a low NAV really mean a better or cheaper fund? Let’s clear this up once and for all.
What is NAV in Mutual Fund?
NAV stands for Net Asset Value. In simple terms, it’s the price of one unit of a mutual fund on any given day.
Think of it this way. When you invest in a mutual fund, you’re not buying shares of a company directly. You’re buying units of that fund. The price of each unit on that specific day is called Net Asset Value (NAV).
Every mutual fund calculates its NAV at the end of each trading day, after the market closes. SEBI (Securities and Exchange Board of India) mandates that all AMCs publish their NAV daily on the AMFI India website.