Mutual fund Net Asset Value (NAV)

NAV stands for net asset value. It is a measure of the market value of an investment portfolio, based on the value of each security in the portfolio. The NAV is determined by taking the total assets under management, subtracting liabilities and expenses, and adding any income generated by investments. The result is the total market value of all investments in your mutual fund.

NAV per unit is calculated by dividing the scheme's securities' market value by the total number of units held on a given date. For instance, the net asset value (NAV) per unit of a mutual fund is 20 if the scheme's securities have a market value of 200 lakh and the fund has distributed 10 lakh units to investors, each worth 10 rupees.

The NAV of a scheme also fluctuates on a daily basis because the market value of securities changes every day.

The daily NAVs of mutual fund schemes are posted on the websites of the respective mutual funds and

According to SEBI Mutual Fund Regulations, mutual fund schemes' net asset values (NAVs) are disclosed at the conclusion of each trading day after markets have closed, in contrast to stocks, whose prices fluctuate minute by minute. In addition, units of mutual fund schemes are only distributed at prospective NAV, or the NAV that would be declared at the end of the day, based on the closing market value of the securities held in the respective schemes (except for liquid and overnight funds).

Even if a mutual fund accepts applications after the deadline, you will still receive the next business day's NAV. Furthermore, redemptions are subject to the cut-off time regulations.

How Is The Applicable NAV Determined?

The applicable net asset value (NAV) is determined by calculating the amount that would be received if all securities were sold at market price at the end of every day. This calculation uses the current market price of each security in your mutual fund's portfolio as though it were sold separately and then added together to determine your fund's NAV or its total value.

Liquid Funds/Overnight Funds

Subscription  

Where the application is received up to 1.30 p.m. on a day and the funds are available for utilization before 1.30 p.m. without availing any credit facility, the closing NAV of the day immediately preceding the day of receipt of application.

Where the application is received after 1.30 p.m. on a day and funds are available for utilization on the same day without availing any credit facility, the closing NAV of the day immediately preceding the next business day; and

Irrespective of the time of receipt of application (before or after 1.30 p.m. on a day), where the funds are not available for utilization before 1.30 p.m. without availing any credit facility, the closing NAV of the day immediately preceding the day on which the funds are available for utilization.

Redemption

Where the application is received up to 3.00 pm

– the closing NAV of day immediately preceding the next business day; and

Where the application is received after 3.00 pm

– the closing NAV of the next business day.

All Other Schemes (other than Liquid Funds & Overnight Funds)

Subscription  

Where the application is received up to 3:00 p.m. and funds are available for utilization before 3:00 p.m., the closing NAV of the day on which the application is received.

Where the application is received after 3:00 p.m. and the funds are available for utilization, closing NAV of the next business day.

Irrespective of the time of receipt of application (before or after 3:00 p.m.), where the funds are not available for utilization, the closing NAV of the day on which the funds are available for utilization before cut-off time of 3.00 p.m.

Redemption

Where the application is received up to 3.00 pm – closing NAV of the day on which the application is received; and

Where the application is received after 3.00 pm – closing NAV of the next business day.

What Is Sale And Repurchase Price?

The sale and repurchase price (S&P) represents the number that would be paid for each share if you sold them today. It also represents how much money you can expect to receive when you sell shares from your mutual fund into an account with another institution at some point in time in the future

Sale Price

Sale Price is the price payable per unit by an investor for purchase of units (subscription) and/or switch-in from other schemes of a mutual fund.

SEBI vide circular no. SEBI / IMD / CIR No. 4 / 168230 / 09 dated June 30, 2009 has abolished Entry Load for all mutual fund schemes.

Hence, during the New Fund Offer (NFO), the Sale Price per unit is at Face Value per unit specified in the respective Scheme Information Document (SID) and Key Information Memorandum (KIM) During the ‘Ongoing Offer’ period (i.e., the date from which the scheme re-opens for subscriptions/redemptions after the closure of the NFO period.), the units may be purchased at NAV i.e., the Sale Price per unit is equivalent to applicable NAV on the date of subscription

Repurchase/Redemption Price

The Repurchase/Redemption Price is the price per Unit at which a Mutual Fund would ‘repurchase’ the units (i.e., buys back units from the investor) upon redemption of units or switch-outs of units to other schemes/plans of the Mutual Fund by the investors, and includes Exit Load, if / wherever applicable.

Redemption price is calculated as follows:

Redemption Price = Applicable NAV*(1- Exit Load, if any) For Example: If the Applicable NAV is ?10 and Exit Load is 2%, then the Redemption Price will be = ?10* (1-0.02) = ?9.80

It may be noted that an AMC / Trustee has the right to modify existing Exit Load structure and/or to introduce Exit Loads subject to a maximum limit prescribed under the Regulations.

Any change in Load structure will be effective on prospective basis and will not affect the existing mutual fund units in any manner.

As per SEBI (Mutual Funds) Regulations, 1996, in respect of Open-Ended Schemes, Repurchase Price (commonly referred to as Redemption price) shall not be lower than 95% of NAV.

It may be noted that units of Closed Ended Schemes cannot be Repurchased prematurely.