NAV: A Fund’s Price
How a fund’s per-unit value is calculated daily, and why a low NAV is not "cheaper".
NAV = (Total value of fund’s holdings − expenses) ÷ Number of units
Net Asset Value — the per-unit value of the fund, calculated once each day after markets close.
NAV is a fund’s per-unit value, updated once daily after market close (unlike stocks, which tick live). Buy ₹10,000 of a fund at NAV ₹100 and you get 100 units; if NAV rises to ₹110, your units are worth ₹11,000.
The single most common beginner myth: “a ₹10 NAV fund is cheaper than a ₹500 NAV fund.” FALSE. NAV is just total value ÷ units — a lower NAV simply means more units exist. A fund’s NAV level tells you nothing about whether it’s cheap, good, or has more room to grow. Judge funds by strategy and cost, never by NAV.
Common mistake“This NMF has a low NAV, so it can grow more / is better value.” Completely false — NAV level is meaningless for comparing funds. A ₹10 and a ₹500 NAV fund holding the same stocks willArranging how your wealth passes on after death. return identically.
Key takeawayNAV is a fund’s per-unit value, set daily. A low NAV is NOT “cheaper” — it just means more units exist. Ignore NAV level when picking funds.
FAQs
Should I buy a fund with a lower NAV?
No — NAV level is irrelevant to returns or value. A “new fund” at ₹10 NAV isn’t a bargain versus an established fund at ₹500. Choose on strategy, track record, cost and fit, not NAV.