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Investors regularly track the current value of their mutual fund to stay informed about their investment’s performance. They do that so they can make informed decisions.

Index Fund Corner

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The reason for monitoring the performance on a regular basis helps the investor check whether their fund is growing, stable, or underperforming.

The current value of a mutual fund is determined by its net asset value (NAV).

What is Net Asset Value (NAV)?

NAV is the price of one unit of a mutual fund. It is like a place where people put their money together and that money is used to buy stocks, bonds, and other things. So, after paying the expenses, the remaining amount is divided by the number of units owned by investors.

A unit is basically a type of share in a company. Investors don’t buy stocks directly; instead, they buy units.

The formula for calculating NAV

is [Assets-Liabilities] divided by [Number of shares]

For example, you invest 5,000 in a mutual fund with the NAV equal to 10. So, you will get 500 units.

How to find the current value of a mutual fund?

  1. The first step is to check the value of the NAV, which is updated daily.

    2. You can check the NAV value by visiting the mutual fund company’s official website.

    3. Now, calculate the current value of the mutual fund, which depends on two things: the current NAV price and the number of units you own.

You need to apply a formula to find out the current value of the mutual fund, which is Current Value = Number of Units x Current NAV.

Consider the above example where you got 500 units by investing 5,000. The NAV value was 10 at the time of your investment. Suppose you check it a week later and see the NAV value has been increased to 25.

Use the above formula to calculate the current value. Multiply the units by the current value, which is 500 x 25 = 12,500.

So, your investment was 5,000 and now it is worth 12,500. You got a profit of 7,500.

A higher NAV value increases your investment, while a lower NAV decreases it.



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