NAV (Net Asset Value)
Also known as: Net Asset Value, fund NAV, unit price
NAV is the per-unit price of a mutual fund, calculated as the total value of the fund's holdings minus its liabilities, divided by the number of units.
A fund's NAV is published once each business day after markets close. It reflects the closing value of everything the scheme holds, less its expenses and liabilities, spread across all outstanding units. When you invest, your money buys units at the applicable day's NAV; the units, not the rupee amount, are what you own.
A common misconception is that a low NAV means a fund is cheap and a high NAV means it is expensive. It means neither. A ₹10 NAV and a ₹500 NAV simply reflect how long the fund has been running and how much it has grown. Investing ₹10,000 in either buys the same ₹10,000 of the same underlying portfolio — only the unit count differs.
What matters is the percentage change in NAV over time, which is the fund's return. Comparing the NAV of two different schemes tells you nothing useful; comparing their returns, expense ratios, and risk profiles does.
Timing rules apply. Purchases are processed at a particular day's NAV depending on when the application and the funds are received, with cut-off times set by regulation. For most SIP investors this is a technicality, but for large lump sums it can matter.