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Investing term

NAV

A plain-English definition of NAV— what it means, how it works, and a simple example.

Quick answer

Net Asset Value (NAV) is the per-unit price of a mutual fund: its total assets minus liabilities, divided by the number of units outstanding.

NAV tells you what one unit of a mutual fund is worth on a given day. If a fund holds assets worth ₹100 crore with ₹1 crore of liabilities and has 9.9 crore units, its NAV is ₹10.

When you invest, your money buys units at the current NAV; when you redeem, you sell at that day's NAV. A ₹6,000 investment at a NAV of ₹30 buys you 200 units.

A common myth is that a low NAV means a fund is cheap or better value. It does not — NAV simply reflects the fund's history and unit count. What matters for returns is the percentage change in NAV, not its absolute number.

Related terms

Mutual FundETFIndex FundExpense Ratio

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A note on accuracy:this definition is for general education, not personalised financial or tax advice. Figures are illustrative and rules can change — confirm anything that affects a real decision.