Mutual Fund NAV (Net Asset Value) represents the per-unit market value of a mutual fund scheme. It indicates how much one unit of a mutual fund is worth at a given time. Understanding NAV is crucial for investors, as it helps track the fundís performance and determine the price at which units are bought or sold.

In simple terms, NAV is calculated by dividing the total value of all assets in the fundósuch as stocks, bonds, and cashóminus its liabilities, by the total number of units outstanding. The formula is: NAV = (Total Assets ñ Total Liabilities) / Total Units Outstanding. This value is computed at the end of every trading day based on the closing market prices of the securities held by the fund.

It is important to note that a higher NAV does not necessarily mean the fund is performing better. NAV only reflects the current market value of the fundís holdings, not its future growth potential. Investors should compare returns, risk levels, and fund objectives rather than choosing solely based on NAV.

When an investor purchases mutual fund units, they do so at the current NAV (plus any applicable entry load). Similarly, when they redeem, the payout is based on the prevailing NAV (minus any exit load). Therefore, tracking NAV regularly helps investors make informed decisions about entry and exit timing.

In essence, Mutual Fund NAV is a transparent indicator of a schemeís market value. However, investment decisions should be based on the fundís overall performance, consistency, expense ratio, and alignment with oneís financial goals rather than NAV alone.