Mutual Funds with Low NAV v/s High NAV – Which One to Choose?

Описание: Should You Invest in Mutual Fund with Higher NAV or Low NAV?

In India, Mutual Funds continue to remain one of the most popular investment choices amongst investors. When you consider investing in a Mutual Fund, many assume it is imperative to know the Net Asset Value (NAV) of the fund, as it could impact your returns.
Technically, the NAV of a Mutual Fund is the Total Assets minus the Total Liabilities of a Fund divided by the total number of issued units.

How NAV is Calculated?
NAV = (Total Assets – Total Liabilities) / Number of Units

Total Assets - The accumulated fund corpus of a Mutual Fund is invested in a group of assets, basis the Fund’s objectives, for churning out profits. These assets, including Equities, Gold, Bonds, Debt Instruments, and more, are known as the Total Assets. Total assets also include the profit generated by these assets in the form of dividends, interest, capital gain, etc.

Total Liabilities – The costs which an Asset Management Company (AMC) incurs to manage the fund are termed as Total Liabilities. Total Liabilities primarily include the Management Fees, Marketing Expenses, Distribution Expenses, etc.

Total Units – The sum of all the units held by all the Mutual Fund investors of a scheme are the Total Units of the Fund.

Which One to Choose?
The NAV of the fund is the value at which you buy or sell the units of a Mutual Fund. It is essentially the price per unit of the Mutual Fund. So should the NAV be high or low for you to make a good investment decision? What should be your pick?
Watch this video to find out the answer.

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