Skip to main content

NAV of your mutual fund scheme and how it affects value of wealth

Invest Mutual Funds Online

Download Mutual Fund Application Forms

THE calculation of the net asset value (NAV) assumes an important place in the manner in which mutual funds operate because they represent the route through which the investors can actually know the value of their investments. Most people are not very clear as to what the mutual fund NAV actually means and a closer look at the whole thing will enable them to get a proper perspective of the way in which things work on this front. Here are some of the important points on this issue.

Value on a particular day: Most mutual funds will calculate the NAV of the fund at the end of each business or working day, so, there is a specified frequency at which this particular exercise takes place. An important point is that since it represents the value at a specific point of time, there is no long-term validity for the figure that is represented here. A change in the value of the underlying assets results in a change in NAV. Thus, if there is a figure of the NAV that has been declared for a particular day, then it will be relevant for all transactions or dealings on that particular day only.

Value of assets: A major component of the entire process of the NAV is the valuation of the assets that are held by the fund. Value of all the holdings of the mutual fund taken together will comprise the bulk of the total valuation of the fund.

So, for example, if there is an equity-oriented fund that holds shares in various companies, then the value of all these shares as on a particular date will comprise the bulk of the total valuation. When there are changes in the share prices, then there will also be a change in the total assets and, hence, this will impact the way in which the NAV will change.

Value of liabilities: Another component of the entire calculation is the value of the various liabilities that are held by the fund and the expenses that are incurred for various purposes. These figures are the amounts that are generated in the course of the day-today dealings and, hence, will have to be reduced from the value of the assets to get the net value of the fund.

The final holdings value should be considered for calculations because there are chances where several current liabilities of the fund would reduce the assets value in the NAV calculation. Also, the expenses that are incurred by the fund would be reduced from this.


Number of units: The NAV of the fund, by itself, has no meaning because this has to be calculated on a per units basis. Only when this is done, would the investor get a correct picture of the present value of their unit. This is the reason why the final part of the calculation of the NAV will involve dividing the value of the assets less the value of the liabilities by the number of units that are outstanding.

The number of units here will also change on a daily basis in an open ended fund, as there are purchases and sales that are taking place each day. So, this will also be a factor that impacts the calculation.

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

--------------------------------------------

Invest Mutual Funds Online

Transact Mutual Fund Online

 

Download Mutual Fund Application Forms from all AMCs

Download Mutual Fund Application Forms

 

Best Performing Mutual Funds

    1. Largecap Funds:
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    3. Mid and SmallCap Funds
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    4. Small and MicroCap Funds
      1. DSP BlackRock MicroCap Fund
    5. Sector Funds
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    6. Gold Mutual Funds
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

 

Popular posts from this blog

Post Office Deposits Interest Rates

Best SIP Funds to Invest Online   SIPs are Best Investments when Stock Market is high volatile. Invest in Best Mutual Fund SIPs and get good returns over a period of time. Know Top SIP Funds to Invest Save Tax Get Rich For further information on Top SIP Mutual Funds contact  Save Tax Get Rich on 94 8300 8300 OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com
Read more

Mutual Fund Registrars - CAMS, Karvy MFS, Sundaram, FTAMIL

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Websites of registrar and transfer agents provide a host of services to distributors and their clients at the click of a button. While distributors have been using R&T websites to get mail back and other services your clients perhaps may not be so familiar with the facilities provided on such portals.   In fact, your clients can register on any R & T web site to use a host of services like accessing portfolio,   Consolidated Account Statement (Karvy + CAMS + FTAMIL + SBFS).   In this article we explore the websites of leading R&T agents CAMS, Karvy and Sundaram BNP Paribas Fund Service which service almost the entire industry. Here are some of the useful features which you and your clients can utilize:   CAMS   CAMS services 17
Read more

How Tax Deducted at Source (TDS) works?

    THE tax season is here. And if you are an employee you can't blame your employer for deducting large chunks of money from your salary towards tax deducted at source ( TDS ), which he is legally obliged to do. Your bank will also deduct some percentage from your FD interest of Rs 10,000 or more towards TDS! So what is this TDS all about? How is it computed? Are there any changes this year? Read on... What is TDS? TDS reduces your taxable income and could even provide tax relief! The TDS collections account for 40 percent of the total taxes collected in the country. As the name suggests TDS is the amount of tax that is deducted at source in certain types of income . The TDS thus collected is deposited in the Government treasury within a specified time. How is it computed? Some of the types of income where TDS is applicable include salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and UTI/Mutual Funds, commission and brokerage
Read more

SBI Magnum Taxgain

Grown 37 times in 23 years- SBI Magnum Taxgain Scheme   Invest Rs 1,50,000 and Save Tax upto Rs 46,350 under Section 80C. Get Great Returns by Investing in Best Performing ELSS Funds Top 4 Tax Saver Mutual Funds for 2017 - 2018 Best 4 ELSS Mutual Funds to invest in India for 2017 1. DSP BlackRock Tax Saver Fund 2. Invesco India Tax Plan 3. Tata India Tax Savings Fund 4. BNP Paribas Long Term Equity Fund Invest in Best Performing 2017 Tax Saver Mutual Funds Online Invest Best Tax Saver Mutual Funds Online Download Top Tax Saver Mutual Funds  Application Forms For further information contact  SaveTaxGet Rich on 94 8300 8300 Leave your comment with mail ID and we will answer them OR You can write to us at Invest [at] SaveTaxGetRich [dot] Com OR Call us on 94 8300 8300  
Read more

How to PPF Account extension after maturity

A PPF account can be retained after maturity without making any further deposits. The balance will continue to earn interest till it is closed. Public provident fund or PPF remains one of the most popular savings options for the long term despite a gradual decline in interest rates over the years. PPF accounts have a maturity period of 15 years and they can be extended. If there is no fund requirement, financial planners say, PPF account holders should extend the account beyond 15 years. In terms of income tax implications, PPF accounts enjoy the benefit of EEE (exempt-exempt-exempt) status . Under Section 80C, contribution up to Rs 1.5 lakh in a financial year qualifies for income tax deduction. The interest earned and maturity proceeds are also tax free. What are your options when a PPF account matures? 1) A PPF account can be closed after the expiry of 15 financial years from the end of the year in which the account was opened. 2) The subscriber can retain his
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now