Net Asset Value (NAV) in case of mutual funds -for knowledge of indian investors


The concept of NAV is explained below in respect of mutual funds in general manner.

The NAV of a mutual fund is the value per unit based on which investors  purchase, redeem or transfer units in the mutual fund. The applicable NAV for any transaction depends primarily on the time at which the transaction request is received by mutual fund offices.

The applicable NAV for liquid funds:

For Purchases:

The cut off time is 2 pm on any business day.

If the application is received at the official site up to cut off time of 2 pm on any working day, we will get the NAV of previous day. For example, if we have put up the application on 31.1.2012 before 2 pm, then the NAV applicable will be NAV of 30.1.2012. If we put the application on 31.1.2012 after 2 pm, then the NAV applicable will be NAV as on 31.1.2012.

For Redemptions:

The cut off time is 2 pm on any business day.

For application received on any business day, up to 3 pm, the NAV of the same day will be applicable. If application received on any business day, after 3 pm, the NAV of next business day will be taken for redemption.

The applicable NAV for equity/other funds:

For Purchases:

The cut off time is 3 pm on any business day.

If the application is received at the official site up to  cut off time of 3 pm on any working day, we will get the NAV of same day. For example, if we have put up the application on 31.1.2012 before 3 pm, then the NAV applicable will be NAV of 31.1.2012. If we put the application on 31.1.2012 after 3 pm, then the NAV applicable will be  NAV as on 1.2.2012.

For Redemptions:

The cut off time is 3 pm on any business day.

For application received on any business day, upto 3 pm, the NAV of the same day will be applicable. If application received on any business day, after 3 pm, the NAV of next business day will be taken for redemption. It is similar to purchases.

C.R. Venkata Ramani

(AICWA)

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