Mutual funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme as reduced by the allowable expenses. Since market value of securities change every day, NAV of a scheme also varies on day to day basis.

The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date net of allowable expenses. For example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs (net of expenses) and the mutual fund has issued 1 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs.20.

NAV is required to be disclosed by the mutual funds on a regular basis – daily or weekly – depending on the type of scheme