Are you eager to buy mutual fund units? Check out the latest mutual fund NAV which takes an essential role while undertaking any mutual fund decision. It is the Net Asset Value or NAV which is an indicator of the market price per units that describes you the number of mutual fund units you hold within your stay in a mutual fund scheme.
In other words, NAV represents the basket of securities in the mutual fund excluding liabilities and divided by the number of outstanding shares.
NAV Mutual Funds
Are you aware of the collective prices of all the instruments which have a direct correlation with NAV? Assess the NAV of any mutual fund scheme which is computed on a unit basis minus all the liabilities. If the entire security prices within a basked get escalated, the mutual fund NAV will also shoot up and vice versa.
Since, the NAV moves with the frequency of the securities prices held within the scheme, subsequently the scheme should compute and publish their NAVs on a daily basis.
To be precise, the formula of Mutual funds NAV are :
NAV = (Value of Assets-Value of Debts)/number of units outstanding
Here,
Value of Assets =Market value of Mutual Fund Investments+Receivables+Accrued Income
Value of Debts=Liabilities+Accrued Expenses
The calculation of NAV task is undertaken both by the asset management company or by an accounting firm which is recruited by the mutual fund.
Direct Mutual Fund Investment
Since the direct plans do not provide the commission to agents but they entail a lower expense ratio. Become aware that the savings on commissions invested amass superior returns on a longer term. This is the reason you must be able to view the NAVs of direct plans on a higher level as against the regular plans. But you can also save modestly on commissions and make superb returns over a specific period of time in direct plans.
However, you should consider them only if you can diligently handle the investments by yourself. In an instance, you need any assistance with mutual fund investments and completing all the formalities, it is prudent to opt for a regular plan.
Lowest NAV Mutual Funds
As per the outlook of financial experts, a higher or lower NAV have barely any significance to investors. Since, they watch out for those funds which are capable of delivering superb returns. But while undertaking any investment, you are required to compare the schemes which have similar portfolios before deciding for the one that accommodates your personal goals.
The pricing of NAV is ascertained in the following manner:
Like one scheme which has been there for quite sometime pushes the NAV to escalate further as compared to the other one valued at lower NAV. This implies the investors would obtain the maximum number of mutual fund units in the scheme with lower NAV and comparatively lesser mutual fund units with a higher NAV. No doubt, both would generate identical returns as the capital gain or loss of investments in the scheme stand identical as they have similar portfolios.
Does NAV of a scheme matter?
Don't mess up yourself in confusion by mixing NAV with share prices? Just like stocks have shares, similarly, mutual funds have NAV. Since the buying and selling happen at the mutual NAV so the NAV can also be used as the book value of the mutual fund units. On the contrary, the stock prices are based on the company's fundamental valuation and future likelihood of the company. It indicates the summation of the portfolio held within the scheme.
A higher NAV implies that the scheme has been performing up to the mark or the scheme has been in operations for a longer time. But you need to be aware of that it is the NAV which carries an impact on the number of units you obtain. You will get lesser number of units if you comparatively choose a scheme with a high NAV but the investment value will remain similar. It is the performance and returns generated by any mutual fund scheme which becomes a matter.
Let us understand by taking a simple example:
Look at two schemes -Scheme A and Scheme B with a NAV of ₹ 200 and ₹ 210 respectively. Let's say you have invested ₹ 33,000. You will get 110 units (33000/300) in scheme A and you will obtain 106 units approx. (33000/310) in scheme B.
Disclaimer : Mutual Fund Investments are subject to market risks, read all scheme related documents carefully before investing.
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