NAV or Net Asset value is the price per unit of a scheme on a given date. It is the NAV of the fund that determines the number of units you will get when you invest in a particular scheme. Many investors have misconceptions about the NAV of mutual funds and about how NAV is linked to a fund’s performance and its returns. Hence as an investor, it becomes very important for you to understand: 1. What is NAV? 2. How is it Calculated? 3. The Application of NAV 1. What is NAV in mutual funds? Net Asset Value (NAV) in simple terms is the current worth of each unit of the mutual fund . NAV is the single most important number for a mutual fund scheme because all transactions of a fund are with reference to NAV. NAV, which reflects the worth of each unit of a scheme, is computed and declared by mutual fund AMCs on all business days. Depending on the type of scheme NAV is calculated up to 2 or 4 decimal places. 2. How to calculate NAV? On subtracting liabilities of a scheme from its to