BASICS
What is NAV in Mutual Funds? — Simple Explanation with Example
person TopFund Research
schedule 5 min read
calendar_today 28 Jun 2026
NAV (Net Asset Value) is the price of one unit of a mutual fund. Learn how NAV is calculated, why it changes daily, and what it means for your investment.
NAV stands for Net Asset Value — it's the price you pay for one unit of a mutual fund. Think of it like the share price of a mutual fund.
How is NAV Calculated?
NAV = (Total Assets – Liabilities) ÷ Number of Units
For example: If a fund has ₹100 crore in assets and 10 crore units outstanding, NAV = ₹10 per unit.
Does Lower NAV Mean Cheaper Fund?
No. NAV does not indicate how cheap or expensive a fund is. A fund with NAV ₹10 is not cheaper than one with NAV ₹1000. What matters is the fund's return percentage, not its absolute NAV.
This is one of the biggest misconceptions among new investors. Never choose a fund based on its NAV value.
NAV vs Share Price
| Feature | Mutual Fund NAV | Stock Price |
|---|---|---|
| Updated | Once daily (after 5 PM) | Real-time |
| Based on | Portfolio value | Supply & demand |
| Can it be overvalued? | No (tracks assets exactly) | Yes |