How can the NAV of Birla Sunlife Equity Fund Growth Direct Plan fall by 3.28% in one day on 31st December 2014? - P. P. Shenoy
It is possible for a mutual fund's NAV to fall by 3.28 per cent on a single day, as it is the price of stocks in the portfolio which influences the NAV of a particular fund. Stock prices often do swing by 3-5 per cent during the day. Volatility is an inherent part of the stock markets and markets can rise, fall or stay flat. The magnitude of change is usually unpredictable. But having said this, the NAV of Birla Sunlife Equity Fund's direct plan was ₹466.88 on December 30 and ₹469.78 on December 31 2014. This implies that the NAV increased by 0.62 per cent on the date mentioned in your question. Mutual funds are long term investment vehicles. So it always advisable to hold your investments for the long term without bothering about these daily fluctuations.
This article was originally published on February 13, 2015.
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