Net Asset Value is the per-unit value of a mutual fund scheme. It is what one unit is worth on a given day.
The calculation is straightforward: take everything the fund owns, subtract what it owes including accrued expenses, and divide by the number of units outstanding.
When it updates
Once per business day, after markets close and the fund values its holdings. Mutual fund NAVs do not tick through the day the way a share price does — there is one value per day per scheme.
Which day’s NAV applies to your transaction depends on when your money actually reaches the fund house, and cut-off times govern this. Submitting an order shortly before the cut-off with funds that settle the next day means you get the next day’s NAV, not the one you saw when you clicked. For a monthly SIP this rarely matters; for a large lump sum, it can.
The misreading that costs people money
A low NAV does not mean a fund is cheap, and a high NAV does not mean it is expensive.
This is the single most common misunderstanding about mutual funds, and it comes from importing intuitions about share prices, where a low price can genuinely indicate a cheap valuation.
NAV carries no such information. Two schemes holding identical portfolios can have completely different NAVs purely because one launched earlier or has been running longer. If you invest the same amount in both, you own a different number of units at a different per-unit value — and exactly the same rupee exposure to the same underlying assets. A subsequent ten percent rise in the portfolio produces a ten percent rise in your money in both cases.
What matters is what the fund holds, what it costs to run, and whether it suits your horizon. How to choose a mutual fund covers what to look at instead.
NAV and the expense ratio
The expense ratio is deducted before the NAV is published. The number you see is already net of costs — there is no separate bill, which is precisely why the cost is so easy to overlook. The expense ratio explained covers why a small annual percentage compounds into a large one.
NAV and your SIP
A fixed monthly amount buys a varying number of units, because the NAV varies. Lower NAV, more units; higher NAV, fewer. That mechanical consequence is what people mean by rupee cost averaging. It is not a strategy you apply — it is arithmetic that follows from investing a fixed sum at varying prices. SIP versus lump sum covers what that does and does not achieve.
Where to find it
AMFI publishes NAVs for every scheme daily, and each AMC publishes its own. Any figure you see on a platform ultimately traces back to that published data.
Frequently asked questions
Should I buy a fund with a lower NAV?
No. NAV tells you nothing about whether a fund is attractively priced. A new fund offer at ₹10 is not cheaper than an established scheme at ₹400.
Why did my NAV not change today?
NAVs update on business days after market close. Weekends and market holidays produce no new NAV.
Does a falling NAV mean I have lost money?
Your investment is worth less than it was, yes — but only on paper until you redeem. Whether that matters depends on your horizon, which is why the horizon is decided at the start.
Is NAV the same as market price?
For an open-ended fund, you transact at NAV, so effectively yes. ETFs are different — they trade on an exchange and their market price can diverge from NAV.
Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.