NAV, in Plain Words
What the daily value of a mutual fund unit means, and what it does not.
NAV means net asset value. It is the value of one unit of a mutual fund at the time it is published. New money buys units at the applicable NAV. When you leave, you sell units at the NAV that applies then, after any exit cost the scheme charges.
A fund with a NAV of ₹20 is not “cheaper” or “newer” than a fund with a NAV of ₹200. The number reflects that fund’s own history. Comparing two NAVs across different schemes does not tell you which one will do better.
Your gain or loss is the change in the value of the units you hold, minus costs. A rising NAV helps units you already own. It also means the next instalment buys fewer units. Neither line is a promise about next month.
Cut-off times decide which day’s NAV a purchase or a sale gets. Those times are in the scheme documents. Do not assume a payment made in the evening is invested the same day.
Keep in mind
NAV is the price of one unit that day.
A lower NAV is not automatically a better fund.
Your result depends on how many units you hold and the NAV when you leave.
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