What Is Net Asset Value And How It Is Calculated?
The net asset value is the must-know one for the investors to make the investment with a huge return. This is the value where the investors will able to buy and sell the fund units. You should have to know the nav meaning before investing in the scheme. Then only you can able to gain more return in the short span of the time. The redemption form the fund should be done only when you cleared the doubts regarding it. If you are the new investors and do not know anything then you can simply hire the fund manager and he or she will take care on behalf of you.
How often does this NAV changes?
This is the value that never changes often per day, but you can see the changes in the net asset value at the end of the day. The investors can able to calculate the NAV value on their own by subtracting the total asset with the liabilities and then the total asset value is then divided by the total number of the units outstanding. The investors in the open-ended mutual fund can use this value for knowing the price fluctuations. It is necessary for the mutual funds to the district almost full capital gain and the dividend income.
This means that the nav will get reduced and so they need to be solved with the paid amount. In the closed-end NAV, the price of a share will be multiplied with the total number of it. The net asset value of the mutual fund should be less and so the people will get a huge return. Also, during the redemption of the money at the end of the scheme, people need to consider the net asset value. Then only they will know the amount they will get back in the lump sum. The change in the nav will help you to know about the rise and the fall of the scheme.
Why timing is essential for NAV?
The nav meaning it should be known for the investors. It is the one that represents the fund’s share market value. There are the two types of the net asset value calculate none is the general one and ht other one is daily. This NAV is totally different from the equity share of the market price. The nav is for the selling and buying the fund units and so you should not confuse with the market price. The nav is depended on the timing.
Yes, this is true as you can able to see the time bounds for the different schemes like the liquid and the equity funds. The equity fund will get more time compared to the liquid fund. Thus when you submit the application late you will be allotted for the nav the next day. Thus it depending on the submission time, the investor will receive the nav from the next, same or the previous one.