Is NAV like stock price of the funds? When are they updated?Asked
NAV (Net Asset Value) is the total value of assets being managed in a mutual fund divided by the number of units of the mutual fund i.e. the price of a unit of a mutual fund.
When you invest in a mutual fund, you are effectively buying units of that mutual funds. When you want to redeem your investment, and get your money back, you sell the units of the mutual fund that you had bought earlier.
A mutual fund's price, or its NAV, is determined once a day after the markets close at 3.30 p.m. Hence, the value of the NAV of any mutual fund changes daily. All the NAV’s are based on the last closing prices of the stocks. Groww updates these changes in NAV in your portfolio at 8 am next day.
Net Asset Value of mutual funds are updated on a daily basis. Each of the three categories of mutual funds namely debt, equity and liquid funds have a different timing of their cut off after which their NAV is changed from the previous day’s NAV to today’s NAV. All the NAV’s are based on the last closing prices of the stocks.
These changes in NAV are reflected in your portfolio at around 10:00 pm on a daily basis.
The cut off time for liquid funds is around 2 pm which means if you are buying units after 2 pm in a liquid fund, your units are allotted on the same day’s NAV and if the units are bought before 2 pm, units are allotted on previous day’s NAV.
In the case of equity and debt funds the NAV is changed at 3pm post which investors are allotted units on the basis of that day’s NAV and if units are purchased before 3pm previous day’s NAV is used to allocate the units.
Once the mutual funds update their NAVs, these new NAV’s are updated on all the online trading and business news websites.