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Before we get into the more intense stuff, which is, calculating the Reliance Mutual Fund NAV - letu2019s first understand what NAV is and what is its role. NAV stands for Net Asset Value. This is the value at which an investor buys or sells their mutual fund units. It is basically the cost of each unit of the mutual fund scheme. It also sometimes called as the Net Book Value or the Net Value.
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Before we get into the more intense stuff, which is, calculating the Reliance Mutual Fund NAV - let’s first understand what NAV is and what is its role. NAV stands for Net Asset Value. This is the value at which an investor buys or sells their mutual fund units. It is basically the cost of each unit of the mutual fund scheme. It also sometimes called as the Net Book Value or the Net Value.
Reliance Mutual Fund NAV Calculation More or less, the NAV calculation for all the fund houses are the same. Even Reliance as an AMC (Asset Management Company) follows the same NAV calculation procedure. Net Asset Value is calculated by dividing the total net assets that the fund holds by total number of outstanding shares. To determine the total net assets held by the fund, Reliance subtracts any liabilities of the fund from the total assets owned. Let’s break all of these words into one simple formula:
NAV = (Total Assets Owned - Any Liabilities) / Total Number of Outstanding Units The assets here is calculated as sum of market value of mutual fund investments, receivables and accrued income. And liabilities is the sum of debts and other accrued expenses. For instance, if the market value of securities held by the fund is INR 600 lakh and the mutual fund issues 20 lakh units of INR 10 each. Then, Reliance Mutual Fund NAV will be INR 30.
What is the role of Reliance Mutual Fund NAV for an investor? From the viewpoint of an existing Reliance Mutual Fund investor or a prospective investor, Reliance mutual fund NAV has a big role to play. This informs the investor about how much fund units are they going to get when they buy into the fund. Or, sell when they buy out of the Reliance mutual fund scheme. NAV can also help in gauging a fund’s performance, sometimes. High NAV translates that the fund has been consistently performing well. However, it is recommended to gauge the fund’s performance not by its NAV but by the returns it has generated historically.
When is Reliance Mutual Fund NAV Calculated? According to SEBI guidelines, all mutual fund NAVs will have to be calculated by the end of the day. Calculating the NAV during market hours is impossible as the prices of the stocks held by the mutual funds (underlying stocks) changes from time to time. This is the reason why NAV calculation for all of the Reliance mutual funds is done at the end of the day. End of the day calculation of NAV helps to take into account the closing prices of all the stocks that is being held by Reliance Mutual Fund.
How to Invest in Reliance Mutual Funds? If you wish to invest or buy any of the schemes under Reliance Mutual Funds, you can do so by opting for the direct plan or the regular plan. Under the direct plan, you will have to buy the fund through the AMC (Reliance) directly. You can do so by visiting their website or by offline means. You can buy Reliance Mutual Fund units through the regular plan by visiting the websites of some financial technology companies. Disclaimer: Mutual Fund Investments are subject to market risks, kindly read all scheme related documents carefully before investing.
