Low NAV doesn't mean a cheaper fund

Summary: Do you look at a fund’s NAV before investing? Here’s why low NAVs don’t imply that a fund is cheap and the metrics you should consider instead. “Just Rs 10 per unit.” Few lines sell a new mutual fund as effectively as this one. The suggestion is subtle but powerful: a low NAV (net asset value) means the fund is cheap and buying early could mean bigger gains. It is an argument that sounds intuitive, which is precisely why so many investors fall for it during NFO (new fund offer) season. The reality is far less exciting. A fund’s NAV tells you nothing about how ‘cheap’ or ‘expensive’ it is and has no bearing on the returns you will earn. Two funds holding the same portfolio will deliver identical ret

This article was originally published on September 30, 2020, and last updated on December 15, 2025.