Is it possible to predict NAV of a scheme?

I started investing in ELSS funds this year. How can I know whether NAV of a mutual fund scheme will get lower or higher compared to the previous day's NAV before the market closure? Is it possible to predict that by looking at the holdings of fund end up in losers or gainers list? To be more precise, I am looking at NAV of fund A, which has top holdings in companies X, Y and Z. If X, Y, Z loses on a particular day, will that directly imply fund A's NAV will get lower by the end of that day?
- Srikanth

As a new comer to equity mutual funds, you don't have to spend so much time looking at the NAV of a scheme on a daily basis. The basic idea behind investing in a mutual fund is that you don't want or have the time to track the market on a daily basis and take investment decision. That is why you are paying a fee and hiring a fund manager to do that job for you.

As for your question, a major fall in top holdings of a scheme will obviously drag the NAV of a scheme. But it won't be possible to predict the extent of the fall because we won't know the exact allocation of each stock in the scheme portfolio as mutual funds usually declare their portfolio for every month-end date only. You also won't have the details of expenses incurred by the fund on that particular day.

This article was originally published on December 02, 2015.