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TS Bhatia (HR Executive)     17 October 2008

nav calculation

How is daily NAV calculated ?


Learning

 3 Replies

Sankaranarayanan (Advocate)     17 October 2008



 


The net asset value of the fund is the cumulative market value of the assets fund net of its liabilities. In other words, if the fund is dissolved or liquidated, by selling off all the assets in the fund, this is the amount that the shareholders would collectively own. This gives rise to the concept of net asset value per unit, which is the value, represented by the ownership of one unit in the fund. It is calculated simply by dividing the net asset value of the fund by the number of units. However, most people refer loosely to the NAV per unit as NAV, ignoring the "per unit". We also abide by the same convention.


 Calculation of NAV


 


The most important part of the calculation is the valuation of the assets owned by the fund. Once it is calculated, the NAV is simply the net value of assets divided by the number of units outstanding. The detailed methodology for the calculation of the asset value is given below.


Asset value is equal to


Sum of market value of shares/debentures


+ Liquid assets/cash held, if any


+ Dividends/interest accrued


Amount due on unpaid assets


Expenses accrued but not paid






prabodh kumar patel (advocate)     17 October 2008

N.K.Assumi (Advocate)     20 October 2008

valuable information: Thank you


 


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