The Net Asset Value (NAV) of the liquid fund I plan to invest in is much lower than that of other liquid funds. Does it make any difference?
- Sohail
No, not at all. The NAV of a liquid fund, higher or lower, could depend on how long the fund has been in operation. If you invest one lakh in liquid funds, then a fund with a higher NAV will give you fewer units, while a fund with a lower NAV will give you more units. Nevertheless, both the funds will generate similar returns if they are invested in the same securities and have similar expenses.
Therefore, the NAV of a fund doesn't matter and one should only go by the performance of a fund and its portfolio.
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