Understanding NAV

How Mutual Fund Pricing Works

Net Asset Value — or NAV — is the single most important number in mutual fund investing. It tells you the price of one unit of a fund and determines how much you pay when you buy and how much you receive when you sell.

Yet many Pakistani investors misunderstand NAV. Some believe a fund with a lower NAV is "cheaper" and therefore a better deal, while others think a high NAV means the fund is "expensive." Both assumptions are wrong, and this chapter explains why.

You will learn how NAV is calculated daily by AMCs, the difference between offer and redemption prices, and how to use NAV data from MUFAP to track your investment performance over time.