what is NAV (Net Asset Value) of mutual funds |

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What is mutual funds NAV or What is NAV of mutual funds?

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**what is mutual funds NAV**or**what is NAV of mutual funds**. both meaning is same. Are you want to invest your money in mutual funds an heard about**NAV,****Net Asset Value of mutual funds**. so, here a question comes that**what is mutual funds NAV**or**what is NAV of mutual funds**. This question**what is mutual funds NAV**or**what is NAV of mutual funds**

### About this article for "what is nav of mutual funds"

In this article am talking about everything on

**what is NAV of mutual funds**. and how people get confused about**what is NAV of mutual funds**. So, by this article, you will be learned everything about**what is NAV of mutual funds**.### what is NAV of mutual funds?

General public place look at how its in a balance sheet in FIFA Mod look like if you look at a balance sheet in Mitti from their their their liabilities and assets whatever the money is collected from the public you will show it as liabilities we have discussed this area as well but we are revising this topic so that the valuation techniques used by the mutual fund is crystal clear saved liability on one side and whatever investments are bought by the mutual fund will appear on the outside.

Now the investments which are appearing in the acid side the valuation would change day on day so if the mutual fund has bought some share the value of shares may be up on Monday them down on Monday and whenever there is a Movement in the value of the share investment value held by the business changes done in whatever the shares and debentures the mutual fund has invested the mutual fund would earn something like dividend on shares and interest on debentures so whenever there is a dividend which is owned by the winner mutual fund its assets balance food increase because it would on the dividend in cash similarity of agnibina cruel similarly.

When there is an interest earned by the mutual fund the value of acid will go off because there is something which is receivable in the form of interest so if you look at the acid side the acid value moves up and down because of changes in prices of share and whenever some income is URN by the mutual fund in forms of interest and dividend when there is an increase in the acid side corresponding increase would happen on the reserves and surplus under the liability side so you know the balance sheet is salad always whenever 7 expenses incurred by the mutual fund like you know the mutual fund might have to pay some brokerage.

If I have to pay some Commission some advertisement expenses some other administrative expenses salary of the people who are managing the fund new making doors investment decision all these are expenses for the mutual fund never the mutual fund is making doors expenses the acid valued for loan because some form of acid mostly in form of cash or bank balance is going out so the balances of acetone fall then correspondingly the reserves and surplus balance sheet also fall on the liability side no friends this is how the total of the acid side or keep on moving up or down let's take a small example to understand how the units of mutual funds are valued.

what happens in the money contain how is the amount invested and what happens after the amount Sa investor nor the day to day basis say there is a mutual fund scheme which has collected 1 lakh rupees from many investor soap the mutual fund it was it is made offering too many investors from whom the mutual fund collected 100000 rupees and the company in turned issue units of 10 rupees to all of that investor so is collected 100000 and it issued 10000 units of 10 rupees to each of that investor so where was putting money for every 10 rupees delicate 1 unit show the total amount collected is 100000 and the total units issued or ten thousand faces of a balance sheet in a teacher format on asset side there is cash at bank 1 lakh rupees on the liability side it is unit holder's fund 113000 units of 10 rupees to 10000 units of 10 rupees making a liability of 100000 on asset side are there is a cash at Bank of 100000.

know what will the mutual fund do with the money collected the ends you decide which shares to be bought with the money which the mutual fund has collected say the MCI identified shares of three companies A B and C in the shares of company AMC suggested that you should invest issued by 100 shares at 50 rupees in the shares of company be the aims is suggested that you by 250 Shades which are traded AK 300 rupees and in the shares of company see you by hundred States which are traded at hundred rupees.

So this was the scheme of this was investment plan which was designed by the MC after the investment plan was designed and the money was invested if you see the total 90000 rupees have gone out as investment in shares of the mutual fund pay 90,000 to buy the shares of A, B and C now in the balance sheet look like the cash and Bank could fall down from one lakh to 10000 rupees because 90000 we should add in a paid to buy some investment and investment in shares of company is A,B and c put together will have an asset of 90000 there is no change on the liability sad because so far we have not talked about any expenses income show investment of 90000 banks at 10000 and liabilities tournaments at 100000 at this moment.

if I have to ask you what is the total find the total asset Elvira mutual fund is 100000 then what is the liability other than unitholders liability so so far we have no other Outside liability other than unitholders fund which means the outside liabilities 0 1 lack of assets zero Outside liability the net asset owned by the mutual fund is 100000 now what are the number of units issued by the mutual fund the number of units issued by the mutual fund in R example is 10000 100000 of Net Asset 10000 of number of units to the value per unit the value per unit is one lakh divided by 10000 vs rupees 10 this week all at

this is the position in the mutual fund first made an investment now in the example what we discuss sofa how is the balance sheet looking like select list Jyotish a balance sheet for our understanding there are investments of 90000 there is cash at bank for 10,000 which make the total 100000 on the liability side you have unit holders fund 100000 when will learn the financial aspect of mutual fund will exactly how it is prevented what are the various terminologies used by this is for your understanding.

so this makes the total of liability also to now assume that the fund manager has to be paid salary of 1000 where is a fund manager salaries which has to be paid and which is thousand is unit has been paid means we have already issued cheque and the salary has been paid once you do that on the acid side bank balance should not no longer be 10000 it would come down to 9000 what would happen on the liabilities side on the liability side you will have something like a profit and loss account where you will have a negative amount of thousand words that becomes negative of thousand your total of liability becomes 99000 total of assets.

also becomes 99000 now the net asset owned by the mutual fund is 99000 and what are the number of units issued number of energy Shuda 10000 so 99000 / 10000 you get a

just doing some of the Asset and say that ok the net asset of the mutual fund is 100000 the total of acid side is 100000 there is an Outside liability of 1000 to 100000 - 1000 to the total of the acid side which is 100000 - the salary outstanding of 1000 to 100000 - 1000 you will get 99000 if you divided by the number of Ruby 9.9 so she do this amount has not yet been paid because I have considered as a liability the energy still remains to be 9.9 so if I have to summarise this

so that you had a hundred shares 100 into 55000 the total investment pool or investment basket has increased from 90000 to 95000 know what will be the corresponding impact on the liability side you have a negative reserves and surplus of 1000 note 8 mega team reserves and surplus of 1000 is because of the fund managers salary now you have a unrealized gain of 5000 in investments of shares in company so this 1000 - 1000 and 5000 of increase in the acid value which is again so 5000 - 1000 and value would become 4000 now the reserves and surplus balance of 4000 is attributable to the unit holder it is not allowed said liability as you have profit and loss account which belongs to the shareholders this reserves and surplus balance would belong to the unit holders if total of the acid side 95000 + 10000 it is not one lakh but now it is 105000 become the liability side this is also no longer 100000 it is 100000 + 4000 + 1000 the total becomes 105000 so the total is 105000 even under liability assets.

now what is the total Acetone by the mutual fund the total of the acid which are owned by the mutual fund is 105000 is that the net asset know the net asset is 105000 of the total assets - 1000 of liability which is 104000 and the number of units issued by the mutual fund 10000 so you get a

if someone wants to redeem 1 unit they will get what 10.4 so this 10.4 one can earn money compared to the amount invested there is a gain of 40 paise per unit this is how enable fluctuate similarly is there a decrease in prices of share or decrease in price of debentures your

Final Words:

so,

So this was the scheme of this was investment plan which was designed by the MC after the investment plan was designed and the money was invested if you see the total 90000 rupees have gone out as investment in shares of the mutual fund pay 90,000 to buy the shares of A, B and C now in the balance sheet look like the cash and Bank could fall down from one lakh to 10000 rupees because 90000 we should add in a paid to buy some investment and investment in shares of company is A,B and c put together will have an asset of 90000 there is no change on the liability sad because so far we have not talked about any expenses income show investment of 90000 banks at 10000 and liabilities tournaments at 100000 at this moment.

if I have to ask you what is the total find the total asset Elvira mutual fund is 100000 then what is the liability other than unitholders liability so so far we have no other Outside liability other than unitholders fund which means the outside liabilities 0 1 lack of assets zero Outside liability the net asset owned by the mutual fund is 100000 now what are the number of units issued by the mutual fund the number of units issued by the mutual fund in R example is 10000 100000 of Net Asset 10000 of number of units to the value per unit the value per unit is one lakh divided by 10000 vs rupees 10 this week all at

**Net Asset Value**per unit friend again I am repeating excluding the unit holds liability there is no other liability for the mutual fund at this moment so the total of asset is 100000 and total number of units at 10000 1 lakh divided by 10000 you get a n a v of rupees 10 this is the position when the mutual fund has made investment in those 3 share the overall picture the investment made air at 19000 the cash at bank is at 10000 and there are no outside liabilities be very careful if there are any outside liabilities you have to deduct from the net asset show the net assets owned by the mutual fund is 100000 the number of units at 10000 to 100000 divided by 10000 you get a NAV of 10 rupees.this is the position in the mutual fund first made an investment now in the example what we discuss sofa how is the balance sheet looking like select list Jyotish a balance sheet for our understanding there are investments of 90000 there is cash at bank for 10,000 which make the total 100000 on the liability side you have unit holders fund 100000 when will learn the financial aspect of mutual fund will exactly how it is prevented what are the various terminologies used by this is for your understanding.

so this makes the total of liability also to now assume that the fund manager has to be paid salary of 1000 where is a fund manager salaries which has to be paid and which is thousand is unit has been paid means we have already issued cheque and the salary has been paid once you do that on the acid side bank balance should not no longer be 10000 it would come down to 9000 what would happen on the liabilities side on the liability side you will have something like a profit and loss account where you will have a negative amount of thousand words that becomes negative of thousand your total of liability becomes 99000 total of assets.

also becomes 99000 now the net asset owned by the mutual fund is 99000 and what are the number of units issued number of energy Shuda 10000 so 99000 / 10000 you get a

**net asset value**of 9.9 see what happened the**net asset value**earlier was 10 rupees because there was an expenditure of 1000 the**net asset value**came down from 10 to 9.9 in the same example if we assume that the salary was not eaten per day salary was not it be there would be a salary outstanding of 1000 so that there is a liability side and your reserves and surplus would be negative of thousand because it is a lawyer expenditure thousand salary payable would come exist in the books as thousand and total of liability still is 100000 and the total of acid side is also 1 lakh in this case what is the net asset owned by the mutual fund.just doing some of the Asset and say that ok the net asset of the mutual fund is 100000 the total of acid side is 100000 there is an Outside liability of 1000 to 100000 - 1000 to the total of the acid side which is 100000 - the salary outstanding of 1000 to 100000 - 1000 you will get 99000 if you divided by the number of Ruby 9.9 so she do this amount has not yet been paid because I have considered as a liability the energy still remains to be 9.9 so if I have to summarise this

**net asset value**is the total asset owned by the commercial fund - the total of outside liabilities divided by number of units friend be invested in shares of three companies agency and the total amount put together 90000 no we bought 100 shares of company at 50 rupees for a moment assume that after a month just giving a timer in after a month the share price of a increase from 50 and now it is become hundred so earlier it was 100 into 58 5000 rupees now it became 100 in 200 and the value becomes 10000 what is the increase in value the increase sin value is 5000 so the investment has increased from 19000 to 95000 investment value has increased from 90000 to 95000 why the prices of shares of company increase from 5200.so that you had a hundred shares 100 into 55000 the total investment pool or investment basket has increased from 90000 to 95000 know what will be the corresponding impact on the liability side you have a negative reserves and surplus of 1000 note 8 mega team reserves and surplus of 1000 is because of the fund managers salary now you have a unrealized gain of 5000 in investments of shares in company so this 1000 - 1000 and 5000 of increase in the acid value which is again so 5000 - 1000 and value would become 4000 now the reserves and surplus balance of 4000 is attributable to the unit holder it is not allowed said liability as you have profit and loss account which belongs to the shareholders this reserves and surplus balance would belong to the unit holders if total of the acid side 95000 + 10000 it is not one lakh but now it is 105000 become the liability side this is also no longer 100000 it is 100000 + 4000 + 1000 the total becomes 105000 so the total is 105000 even under liability assets.

now what is the total Acetone by the mutual fund the total of the acid which are owned by the mutual fund is 105000 is that the net asset know the net asset is 105000 of the total assets - 1000 of liability which is 104000 and the number of units issued by the mutual fund 10000 so you get a

**net asset value**of 10.4 so friends this is how the**net asset value**of mutual funds are computed what do you exactly interpret when you say**Net Asset Value**it is the value of 1 unit in the net asset Mutual Funds with the net asset mutual fund was 1 lakh 1 unit had a value of 10 rupees which means if the person wants to sell unit back to the mutual fund or reading the units they will get this value of n a v so after the increase in the value of shares of a limited.if someone wants to redeem 1 unit they will get what 10.4 so this 10.4 one can earn money compared to the amount invested there is a gain of 40 paise per unit this is how enable fluctuate similarly is there a decrease in prices of share or decrease in price of debentures your

**net asset value**would come down so when you look at the acid side you should consider the investment and also the liquid cash or bank which is held by the mutual fund write so this is how you compute the**net asset value**SEBI regulations required at the**net asset value**of a mutual fund scheme has to be computed daily and it has to be publishedFinal Words:

so,

**what is NAV of mutual funds**? the**nav of mutual funds**is that cost which is applied to a single unit. And I helped you in your question**what is NAV of mutual funds**. so now you will never ask that**what is nav of mutual funds**. If you got any knowledge then please comment your words and suggestions.
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