Net Asset Value

Net asset value or NAV is the most commonly associated word with mutual funds and widely used by investors while buying and selling mutual fund units. NAV of a mutual fund is the market value of the assets of the scheme minus its liabilities. It is calculated by dividing the value of net assets by the outstanding number of units. In simple words, NAV is the value of each unit of a particular mutual fund scheme on any given business day. It varies day to day as the market value of securities changes every day. NAV helps in determining the price at which an investor can purchase or sell mutual fund units. Just as investors look at stock prices to find out how their equity investment is performing, a mutual fund investor can keep track of the schemes by looking at the NAV per unit. However, NAV has nothing to do with the future performance of the fund. It is simply the price of a unit of the fund on a particular day.


This term is used to gauge the correlation between the mutual fund scheme and the benchmark index measured in the range of 0 to 100. R-squared of 100 means that the mutual fund moves in tandem with the benchmark index and R-squared of 0 means least correlation.

Sharpe Ratio

This ratio measures the risk-adjusted performance for each unit of dispersion measured by Standard Deviation. Higher Sharpe Ratio shows superior risk-adjusted performance of a fund, i.e. fund has generated higher returns for every unit of risk taken.