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What is the exact proforma of Net Asset Value (NAV) calculation by Asset Management Companies. Where can I find it? Where can I exactly find all the Ingredients in NAV calculation?. Can you please assist?
- Kunal
The Net Asset Value (NAV) is the worth (in market terms) of each unit of the fund.
Simply put, NAV = net assets of the scheme / no. of units outstanding or NAV = market value of all investments in a fund minus liabilities and expenses/outstanding number of units.
Here is a detailed calculation offered by Reliance Mutual Fund.
Mutual fund assets usually fall under two categories - securities & cash. Securities, here, include both bonds and stocks. Therefore, the total asset value of a fund will include its stocks, cash and bonds at market value. Dividends and interest accrued and liquid assets are also included in total assets. Also, liabilities like money owed to creditors, and other expenses accrued are also included.
Now the formula is: Net Asset Value (NAV) = (Assets - Debts) / (Number of Outstanding units)
Here: Assets = Market value of mutual fund investments + Receivables + Accrued Income
Debts = Liabilities + Expenses (accrued)
The market value of the stocks & debentures is usually the closing price on the stock exchange where these are listed.
This article was originally published on January 13, 2016.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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