NAV Full Form
Net Asset Value
What does NAV stand for? A finance term, explained.
NAV Full Form in English, letter by letter
NAV stands for Net Asset Value, the per-unit value of a mutual fund scheme, found by dividing assets minus liabilities by the units outstanding.
NAV Full Form in Indian Languages
Open a mutual fund statement and NAV is printed against every scheme. NAV means Net Asset Value, the price at which units are bought and sold, and the term is shown below in six Indian languages.
How NAV Is Calculated
The NAV full form is Net Asset Value. It is the per-unit value of a scheme: total assets minus total liabilities, divided by the units outstanding on that day.
Assets are the shares, bonds and cash the fund holds, valued at market prices. Liabilities include expenses payable, accrued fees and any borrowings. The figure is worked out for every scheme on every business day.
Take a fund holding ₹100 crore of investments with ₹2 crore of liabilities and 10 crore units outstanding. Its NAV is (100 − 2) ÷ 10, which is ₹9.80 per unit.
During a New Fund Offer, units are usually issued at a fixed ₹10. From allotment onwards the NAV moves daily with the market and the fixed price disappears.
The Cut-Off Hour Decides Your Price
SEBI's cut-off rules decide which day's NAV you receive. In most schemes an order accepted before 3:00 pm gets that day's NAV, and one after 3:00 pm gets the next business day's. For liquid and overnight schemes, the cut-off for purchases is 1:30 pm, and redemptions have a 3:00 pm cut-off.
Since February 2021 the NAV for a purchase also depends on when your money actually reaches the fund. An order placed before the cut-off at 2 pm does not get that day's NAV if the payment is realised only the next day. This is why a UPI or net banking payment is cleaner than a cheque.
The rule exists to stop last-minute orders from riding on information the fund could not have acted on.
AMCs publish the day's NAV on their websites and on the AMFI portal by the evening, and it also appears in newspapers and on fund aggregators the following day.
NAV, Price and Value: Do Not Mix Them Up
NAV is not a share price
A fund unit is not a listed share, so an open-ended scheme has no exchange premium or discount. Units are created and redeemed at the NAV itself, straight from the fund house.
Entry load is gone
Since 1 August 2009 mutual funds cannot charge an entry load, so the price you pay is the declared NAV. An exit load, often between 0.25 and 1 per cent, may apply if you redeem early. Check the scheme document for the exact slab.
Where NAV and price diverge
Close-ended schemes and ETFs trade on exchanges, so their market price can sit above or below NAV, a premium or discount. On the exchange you pay the market price, not the NAV.
Working Out Returns From NAV
Simple capital gain is redemption NAV minus purchase NAV, divided by purchase NAV, times 100. Add any payout for a total return figure.
Because NAV changes daily and distributions reinvest, schemes report CAGR over one, three and five years, and XIRR when cash flows are irregular. That is the number to compare across funds.
For a SIP, a simple gain on the first instalment overstates the picture, because each instalment bought units at a different NAV. Calculators and reports therefore show XIRR, which weights every instalment by its date.
A low NAV does not mean a cheap fund. A ₹10 NAV and a ₹200 NAV can hold identical portfolios. Only the percentage change matters, not the rupee level.
A worked example: you invest ₹10,000 when the NAV is ₹25. You get 400 units. If the NAV rises to ₹30, the units are worth ₹12,000, a gain of 20 per cent. The same ₹10,000 at a NAV of ₹250 would buy 40 units, and the same rise to ₹300 would give the same 20 per cent.
Where to Check NAV Each Day
AMFI publishes every scheme's NAV daily at amfiindia.com, and each AMC site lists its own. Searching the scheme name plus NAV, or using a broker app, gives the same figure.
If you invest through an app, the order note shows the NAV at which units were allotted. That figure is the one that decides your gains, not the market mood of the day.
Registrars such as CAMS and KFin send consolidated statements showing units and NAV at each transaction, which is exactly what you need when filing capital gains.
Make sure you are comparing the right plan. A scheme has Regular and Direct plans, and growth and IDCW options, each with its own NAV. The Direct plan's NAV is higher over time because it has a lower expense ratio, which does not make it a different fund.
NAV, Net Asset Value, tells you what a unit of your fund is worth each day. Use it to track gains, not to judge whether a fund is cheap.
NAV Full Form: Common Questions
What is the full form of NAV?
NAV means Net Asset Value, the per-unit value of a mutual fund scheme, calculated as total assets minus liabilities divided by units outstanding, and declared for every business day.
Is a low NAV a good time to buy a fund?
No. The NAV level does not show value. A ₹200 NAV fund and a ₹12 NAV fund can hold the same kind of portfolio. Judge the scheme by its holdings, expense ratio and consistency instead.
What is the mutual fund cut-off time?
Generally 3:00 pm for most schemes, and 1:30 pm for purchases in liquid and overnight schemes. For purchases, the money must also be available to the fund by the cut-off to get that day's NAV.
Where can I check today's NAV?
On the AMFI website at amfiindia.com, on your AMC's site, or in any fund app or broker platform. The day's NAVs are usually published by the evening, and the previous day's figures appear in newspapers.
Does NAV change every day?
For open-ended equity and debt schemes it changes on every business day, because the underlying portfolio is revalued at market prices. On weekends and market holidays the last business day's NAV carries forward.
Why do Direct and Regular plans have different NAVs?
Both hold the same portfolio, but the Direct plan has no distributor commission and so a lower expense ratio. Over time that gives the Direct plan a slightly higher NAV.