I have been investing in mutual funds for the past eight years and I have been a regular follower of your website as well. I have just noticed that different mutual funds follow different precision for the decimal points in their NAV and units allotted to the customer. Birla Frontline Direct Growth fund has only 2 decimal point precision, whereas Franklin India Index NSE Nifty Direct Growth fund as 4 decimal point precision. Is there a rule or mandate as to what should be the precision from SEBI or AMFI? Please clarify.
To ensure uniformity, Sebi has asked mutual funds to round off Net Asset Value (NAV) up to four decimal places for index funds and all types of debt funds. Mutual funds can round off NAVs up to two decimal places for all equity-oriented and balanced schemes. However, mutual funds have the freedom to round off the NAVs up to more than two decimals places in the case of equity-oriented and balanced schemes. Mutual funds should make relevant disclosure on this regard in Scheme Information Document (SID).