The dashboard says that units will be allocated on Thursday. Will the NAV be of today's date of the date of allocation (as shown on the dashboard)?Asked
Net Asset Value or NAV is the fund’s market value per unit. It is the total value of assets being managed in a mutual fund divided by the number of units of the mutual fund. Mutual funds collect money from investors and invest in various investment vehicles such as stocks, bonds, etc. The sum total of the current value of all the assets (stocks, bonds, etc) and the cash they have is called Asset Under Management or AUM. As the price of stocks changes with time, total value of AUM changes and as a result NAV varies.
NAV= (Total AUM) ÷ (Total Number of Units)
NAV of a fund is calculated on the basis of the closing prices at the end of the trading day and updated on the next day. A person can invest in mutual fund on any business day of the year, but one may or may not get the same day’s NAV. It could be yesterday’s, today’s or tomorrow’s NAV. It depends on the time you submit your application and transfer the money to the fund house. This time is known as cut-off time in a mutual fund and it differs for different types of funds.
Cut off timings for types of funds:
Type of funds - Cutoff timing
Liquid funds - 2 pm
Equity funds - 3 pm
Debt funds - 3 pm
In India, people do attach a lot of importance with the NAV of a mutual fund. As a mutual fund investor, NAV shouldn’t be paid much attention to. The other factors such as Asset Under Management (AUM) size, past performance, alpha, beta and other financial factors should be given importance.
On Groww, you can see the NAV of any fund from the end of the day yesterday (or last working day in case of a weekend). In your case, please check when you have submitted the application and transferred money to the groww, NAV allocation will depend on the type of the funds you have invested in and the cutoff timings mentioned above.