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How to Track & Evaluate Mutual Fund Performance
In summary
The price of a mutual fund unit is represented by its Net Asset Value (NAV), which is calculated using the value of the scheme’s underlying investments.
- NAV is calculated by dividing net assets by the number of units outstanding.
- Net assets include the value of investments and other assets after applicable liabilities and provisions.
- NAV is generally calculated and disclosed at the end of each business day.
- The value of underlying securities can cause NAV to rise or fall.
- The NAV applicable to your transaction depends on the transaction type and applicable cut-off rules.
- The Bajaj Broking website can help you explore mutual fund schemes and investment options.
Unlike a stock, you do not continuously buy and sell an open-ended mutual fund at a live market price. The applicable NAV is determined according to the rules for your transaction.
What is the price of a mutual fund unit?
The price of a mutual fund unit is generally referred to as its NAV. NAV stands for Net Asset Value and represents the value of one unit of a mutual fund scheme.
To understand NAV, you first need to look at what the fund owns. A mutual fund may hold shares, bonds, money market instruments, or other permitted securities. The value of these investments, along with other assets, is adjusted for liabilities and provisions.
The resulting net assets are divided by the number of units outstanding to calculate the NAV.
You can learn more about mutual funds and Net Asset Value (NAV) to understand these concepts in more detail.
How is mutual fund NAV calculated?
The basic NAV formula is:
NAV per unit = (Market or fair value of scheme investments + current assets and accrued income − current liabilities and provisions) ÷ number of units outstanding
For example, suppose a mutual fund has investments and other assets worth Rs. 10 crore, liabilities and provisions of Rs. 50 lakh, and 9 lakh units outstanding.
Its net assets would be Rs. 9.50 crore.
The NAV would therefore be:
Rs. 9.50 crore ÷ 9 lakh units = Rs. 105.56 per unit, approximately.
The actual calculation follows applicable valuation norms and the scheme’s stated valuation policies.
What makes the NAV of a mutual fund change?
NAV changes when the value of the assets held by the scheme changes. For an equity fund, movements in the share prices of companies held by the scheme can affect its NAV. For a debt fund, factors such as changes in interest rates and the value of debt securities can affect the NAV.
The market value of securities is therefore an important part of NAV calculation.
Expenses and liabilities also affect the value of the scheme. Applicable expenses, including the expense ratio, are accounted for when calculating the scheme’s NAV.
Is mutual fund NAV calculated throughout the day?
No. An open-ended mutual fund does not generally have a continuously updated NAV like a stock has a live market price.
The scheme’s NAV is calculated and disclosed for each business day after the relevant securities have been valued. This means you may see the NAV for a particular business day after the valuation process is completed.
The NAV you see during the day is therefore not the same as a live trading price that changes every few seconds.
Which NAV applies when you invest in a mutual fund?
The NAV applicable to your purchase depends on the type of scheme, transaction, cut-off time, and whether the investment amount has been received and is available for utilisation as required.
For most mutual fund purchase transactions, the applicable cut-off time is 3:00 p.m. However, meeting the cut-off time alone does not automatically determine the NAV. For purchases, the funds must also be available for utilisation in accordance with the applicable rules.
For redemptions, the applicable NAV is determined under the rules applicable to the transaction and scheme.
This means you should not assume that placing an order before 3:00 p.m. always guarantees that day’s NAV.
What is the difference between NAV and the price of a stock?
A stock traded on an exchange can have a continuously changing market price during trading hours because buyers and sellers place orders in the market.
A mutual fund’s NAV, in contrast, is calculated based on the value of the scheme’s underlying portfolio and is generally determined once for each business day.
This difference is important when you are trying to understand why a mutual fund purchase does not work like buying a listed share at a price visible on a trading screen.
How do Growth and IDCW options affect NAV?
Growth and IDCW are options within mutual fund schemes, subject to the scheme’s terms. You can read more about IDCW in mutual funds to understand how distributions affect NAV.
Under an IDCW option, when a distribution is declared, the NAV is adjusted to reflect the distribution and applicable statutory levies, where relevant. An IDCW is not an additional return over and above your investment.
Under the Growth option, income attributable to the units remains invested in the scheme, subject to the scheme’s terms.
Can the NAV tell you whether a mutual fund is cheap?
No. A lower NAV does not automatically mean that a mutual fund is cheaper or offers greater value than a fund with a higher NAV.
For example, a fund with an NAV of Rs. 20 is not necessarily cheaper or better positioned than one with an NAV of Rs. 200. NAV mainly tells you the value of one unit.
When comparing schemes, consider factors such as the investment objective, portfolio, risk level, costs, and performance over appropriate periods rather than looking at NAV alone.
What should you check before investing?
Before investing, understand what the scheme invests in and how its NAV may be affected by market conditions. You can also review the role of the fund manager, the scheme’s investment objective, portfolio, Riskometer, and applicable costs.
If you are comparing schemes, you can compare mutual funds based on relevant factors rather than selecting one only because it has a lower NAV.
The SEBI Riskometer categorises mutual fund scheme risk as Low, Low to Moderate, Moderate, Moderately High, High, or Very High. The Riskometer describes the scheme’s risk level; it does not predict its future return.
Can you calculate how much your mutual fund investment may be worth?
You can use an SIP calculator if you plan to invest a fixed amount regularly, or a lumpsum calculator if you plan to invest a one-time amount.
These calculators provide illustrations based on the assumptions you enter. They do not predict or guarantee the actual NAV or future return of a mutual fund.
Conclusion
A mutual fund’s NAV represents the value of each unit after accounting for the scheme’s assets, liabilities, and outstanding units. NAV changes as the value of the underlying portfolio changes and is generally calculated once for each business day. When investing or redeeming, the applicable NAV depends on the transaction rules, cut-off timings, and other requirements.
Last reviewed: September 2026
Mutual funds are subject to market risk. Please read the scheme-related documents carefully before investing.
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Frequently Asked Questions
Understanding mutual fund pricing
Comparing NAV and investment costs
How does mutual fund pricing work?
Mutual fund units are purchased or redeemed at the applicable NAV. NAV equals the scheme’s assets minus liabilities and expenses, divided by its outstanding units.
What is the pricing strategy of a mutual fund?
Open-ended mutual funds use NAV-based pricing. The applicable NAV depends on the transaction type, cut-off time, and when the fund receives the investment amount.
At what time NAV is calculated?
NAV is generally calculated after market hours at the end of each business day, using the closing value of the scheme’s investments.
Which pricing strategy is best?
There is no universally best pricing strategy. Most mutual funds use NAV-based pricing, while ETFs trade at market prices. Your choice should depend on your goals and risks.
How do fund expenses affect the price of mutual fund units?
Fund expenses, such as the expense ratio and applicable operating costs, are deducted from a mutual fund's assets. This reduces the scheme's net asset value (NAV) compared with what it could have been before expenses. The impact is reflected in the NAV and, consequently, the value of an investor's units.
Does a higher NAV mean a mutual fund is more expensive?
No. A higher NAV does not make a fund more expensive. Compare performance, risk, costs, portfolio quality, and suitability instead of relying on NAV alone.
Disclaimer
Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319
BFL does NOT:
(i) provide investment advisory services in any manner or form.
(ii) carry customized/personalized suitability assessment.
(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.
In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.
Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.
Disclaimer on Risk-O-Meter:
Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.
Disclosure: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.
Disclaimer
Bajaj Finance Limited ("BFL") is an NBFC offering loans, deposits and third-party wealth management products.
The information BFL contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.
This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.
Disclaimer
Mutual Fund SIP calculator may provide potential investors an approximate estimate on the maturity amount of the monthly SIP, purely based on mathematical calculation of the projected annual return rate selected by investor. However, such calculation does not factor the actual performance by the Asset Management Company (AMC) and should not be treated as any advice or assurance about the actual return of investment. Mutual Funds do not have a fixed rate of return and it is not possible to predict the rate of return. Please note that the SIP calculator are for illustrations only and do not represent actual returns which may vary depending on various factors including but not limited to actual performance, expense ratio, taxation, exit load (if any), etc.