How is NAV calculated?

The mathematical formula for calculating NAV is:

Net Asset Value (NAV) = (Assets – Debts) / (Number of Outstanding units)

Assets of a mutual fund scheme are primarily divided into securities and liquid cash. Securities include both, equity and debt instruments, like equity shares, bonds, debentures, commercial papers, etc. Accrued interest and dividends also form part of the assets.

Debts include money owed for outstanding liabilities and expenses. All accrued expenses are included in this.

Number of units can be defined as the total number of units held by all the investors collectively.

Fund house takes into account the market value of all the assets on a daily basis to calculate the NAV.