September 25, 2020

Do you know how NAV is calculated ?

3 min read
how NAV is calculated

how NAV is calculated

Savings are very much important for a common man. He loves to protect, reserve and invest  his earned money in an option which he can get a good profit with a negligible amount of risk. Generally, investors want to play safely while investing his amounts in share market. The amount of risk  is different in different offers.  A regular investor invests mostly in midcaps  and large-cap stocks. In many of the offers, the return is good, but the liquidity is poor, and hence, it is an obvious thing that one feels that his money is blocked. Risk is directly proportional to the return amount. With high risk, one can get a good return.

The best and complete option:

A mutual fund is a best and complete option for an average investor to low and high investor. Mutual funds also get a considerable return with comparatively low risk. Mutual funds also maintained the liquidity of the amount in the majority of the funds. Each unitholder can easily withdraw the amount after a few days from the day of request. The mode of investment is very easy. Most investors do not understand the concept of mutual fund. They don’t know that in a mutual fund for a medium-term, the time period is a minimum of one to three years. It takes time to grow the fund. Each shareholder can start a SIP with the lowest of 500 per month. Lump sum investment options are also available in mutual funds. One can check the offers related to investment at their official site.

The investment:

Investment offers are different for different types of investors. It depends on the amount you invested in mutual funds. When one invests in the mutual fund, a portfolio number is allotted to the investor. All the statements of investments with all the details are sent to him. Each shareholder can check the name of the fund where his money is invested, and he can also check the NAV at what rates the units are offered to him. There is a NAV formula to calculate NAV, which is highly used by the companies to maintain an equal distribution of profit to all the investors.

The NAV formula is net profit divided by the available unit in which the profit is shared, and the amount which comes is called the net asset value. The profit is calculated from the profit after all the expenses and taxes. Hence each and every shareholder can get the NAV of the unit daily from the call centre or at the site of the company. You can also check values easily from many other websites available on the internet.

Mutual fund system is really cool. It is transparent, and hence, it is the best medium to invest for all categories investors. Each shareholder can easily check at what NAV what the amount he had invested and what is his current NAV so that he can easily calculate his profit. Different companies have different investment options. Hence, one should read all the documents carefully before investing.

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