By Suresh Parthasarathy
Mutual funds calculate the value of your investment on every working day. This is called Net Asset Value, or, NAV. This is the rate at which you buy, transfer units or redeem them.
Mutual funds decide the NAV depending on when they receive your request. For instance, liquid funds, declare an NAV even on holidays and non-business days, including Sundays.
Without getting into minute details, in general, funds will use the NAV of the immediate previous day if your request comes in before the cutoff time, usually 2 p.m. or 3 p.m. If your request comes in after that cutoff time, the fund will apply the next day’s NAV.
What are the guidelines for applicable NAV for equity/other types of funds?
Only if you invest more than Rs 1 crore in debt funds will a fund use that day’s NAV.
Would this mean that if I invested on Tuesday morning at 10.00 a.m. in a Liquid Fund and the funds were available for use by the fund on the same day, I would get the NAV of Monday?
If you were investing in a liquid fund on Tuesday at 10 a.m. and the money was available for the fund to use that same day, you would get Monday’s NAV. If you were investing in an equity fund, it would be Tuesday’s NAV.