Why can funds tracking the same index have different NAVs?

Imagine you're looking to invest in a Nifty 50 index fund. You come across two options — both track the same index and invest in the same 50 stocks. But one fund has a NAV of Rs 167.10, while the other is priced at just Rs 10.01. You pause and wonder: if both are investing in the exact same index, why is one so much "costlier" than the other? Let's clear this up. First, what is NAV? NAV, or net asset value, is the price of a single unit of a mutual fund. It reflects how much each unit is worth at the end of a trading day. NAV is calculated by taking the total value of all the stocks and other assets the fund holds, subtracting any expenses or liabilities, and then dividing that by the number of units in the fund. So, if the total investment value is Rs 100 crore and there are one crore units, the NAV would be Rs 100 per unit. This value changes daily depending on how the fund's investments perform. Why the big difference in NAVs? It's mostly about time Let's go back to the two Nifty 50 index funds. One has a NAV of around Rs 167.10, while the other is just Rs 10.01. That

This article was originally published on May 12, 2025.