Net Asset Value
Also written NAV · Net Asset Value (NAV) · Net asset value per unit · Net Asset Value (NPS)
The net assets of a mutual fund scheme divided by the number of units outstanding — what one unit of the scheme is worth on a given day, after every liability except the unitholders' own.
In plain language
A scheme owns a portfolio. Value that portfolio at today's market prices, add anything the scheme is owed, subtract everything it owes to people other than its own unitholders, and you have the net assets. Divide by the number of units in issue and you have the NAV.
That is the price at which you buy in and, less any exit load, the price at which you get out. It is not a share price and it carries no information about whether the scheme is cheap — a scheme at an NAV of Rs 12 is not better value than one at Rs 480. The NAV only tells you what your units are worth.
Two accounting rules make the number honest. Securities are marked to market, so appreciation counts even though nothing has been sold. And income and expenses are taken on the accrual principle, so a scheme cannot flatter its NAV by sitting on an unpaid bill.
How it works
Take the workbook's own scheme. Investors bought 20 crore units at Rs 10, mobilising Rs 200 crore. Rs 140 crore went into equities and appreciated 10 per cent; Rs 60 crore sat in bank deposits and money market instruments. The scheme received Rs 8 crore of interest and dividend, paid Rs 4 crore of expenses, and owes a further Rs 1 crore.
Net assets are therefore Rs 200 crore of unit capital, plus Rs 3 crore of profit (8 − 4 − 1), plus Rs 14 crore of unrealised appreciation = Rs 217 crore. Across 20 crore units that is Rs 10.85 per unit.
Notice what the Rs 1 crore payable did. It has not been paid, but it has already been deducted. That is the accrual principle, and it is the single most tested line in the calculation.
How far the number is carried is also prescribed: 4 decimal places for index funds, liquid funds and other debt funds, and at least 2 decimal places for equity and balanced funds.
The formula
NAV = Unit-holders' funds in the scheme (net assets)
÷ Number of outstanding units
The same thing read off the balance sheet instead:
NAV = (Total assets − Liabilities other than to unitholders)
÷ Number of outstanding units
And the profit that feeds it:
+ Interest income + Dividend income + Realised capital gains
+ Valuation gains − Realised capital losses
− Valuation losses − Scheme expenses
A worked example
A diversified equity scheme reports, at the close of 31 March:
| Particulars | Rs crore |
|---|---|
| Market value of equity holdings | 150.00 |
| Market value of bonds held | 67.00 |
| Money market instruments | 2.36 |
| Dividend accrued but not received | 1.09 |
| Interest accrued but not received | 2.68 |
| Total assets | 223.13 |
| Less: fees payable | 0.36 |
| Net assets | 222.77 |
| Units outstanding | 1.90 crore |
NAV = 222.77 ÷ 1.90 = Rs 117.25 per unit
Now price a transaction off it. Entry load is banned, so the sale price is the NAV: an investor putting in Rs 25,000 at an NAV of Rs 43.21 receives 25,000 ÷ 43.21 = 578.570 units.
On the way out it is different. At an NAV of Rs 11.00 with a 1 per cent exit load, the re-purchase price is Rs 11.00 − Rs 0.11 = Rs 10.89. The Rs 0.11 does not go to the AMC — exit load is credited straight back to the scheme.
Why NISM asks about it
Chapter 7 (Net Asset Value, Total Expense Ratio and Pricing of Units) is built around this calculation, and the chapter's own sample question hands you the Rs 200 crore scheme and asks for NAV per unit. Expect at least one arithmetic question where an accrued expense or accrued income is dangled to see whether you apply the accrual principle, plus a conceptual question on why marking to market matters and how many decimal places each scheme type must report.
Common exam traps
- Accrued expenses are deducted even though unpaid, and accrued income is added even though unreceived. The workbook says it explicitly: a scheme cannot show better profits by delaying payments.
- A low NAV is not cheap. NAV per unit says nothing about valuation; it depends entirely on the scheme's launch date and history.
- Sale price = NAV. Entry load has been banned, so there is no longer any mark-up on the way in. Exit load is the only load left, and it reduces the re-purchase price.
- An IDCW payout reduces the NAV on the record date. Receiving a dividend from a scheme is not additional return.
- Unrealised appreciation raises NAV but is not distributable. Valuation gains are ignored when computing distributable reserves.
- Decimals matter in a multiple-choice question: 4 places for index, liquid and other debt schemes; at least 2 for equity and balanced.
Where this is taught
- Series XII · Chapter 5: Mutual Fundsintroduced here
- Series XXI-B · Chapter 6: Mutual Fundsintroduced here
- Series V-A · Chapter 2: Concept & Role of a Mutual Fundintroduced here
- Series XXI-A · Chapter 6: Collective Investment Vehiclesintroduced here
- Series X-A · Chapter 11: Mutual Fundintroduced here
- Series XIX-B · Chapter 8: Valuationintroduced here
- Series II-A · Chapter 5: Basics of Mutual Fundsintroduced here
- Series II-B · Chapter 8: Basics of Mutual Fundsintroduced here
- Series XV · Chapter 10: Valuation Principlesintroduced here
- Series V-D · Chapter 2: Concept & Role of a Mutual Fundintroduced here
- Series XVII · Chapter 2: Financial Markets & Investment Productsintroduced here
- Series V-B · Chapter 2: Concept and Role of a mutual fundintroduced here
- Series V-A · Chapter 7: Net Asset Value, Total Expense Ratio and Pricing of units
- Series V-D · Chapter 7: Net Asset Value, Total Expense Ratio and Pricing of units
- Series XVII · Chapter 4: Retirement Planning Products: National Pension System
Related terms
- Exit loadA charge levied when an investor redeems units, calculated as a percentage of NAV and deducted from it, usually only if the units are sold within a stated holding period.
- Net assetsThe unitholders' funds in a scheme: the market value of everything it owns, plus income accrued and receivables, minus what it owes to others — the figure NAV divides by the number of units.
- Segregated portfolioA ring-fenced sub-portfolio holding the debt instrument hit by a credit event, split out of a scheme so that the good assets stay liquid and exiting investors cannot leave the damaged paper behind.
- Total Expense RatioThe all-in annual cost of a mutual fund scheme as a percentage of daily net assets — the base expense ratio plus brokerage, transaction cost and statutory levies — charged to the scheme, not billed to the investor.
- Accrual principleThe accounting rule that every expense and every income relating to a period is counted in that period whether or not it has been paid or received — so a scheme cannot show better profits by delaying payments.
- Mark to MarketThe daily settlement of a futures position at that day's closing price, so gains and losses are paid in cash every evening instead of accumulating until expiry.
- Gross Net Asset ValueThe value of a Category III AIF's assets before incentive fees are deducted — and the base on which management fees are charged, which is why it is not the same as the NAV investors see.
- Benchmarking AgencyAn agency notified by an AIF association covering at least 33% of AIFs, which collects AIF performance data and publishes industry benchmarks and benchmark reports for individual funds.
- Class of UnitsA group of units in a Category III AIF carrying its own rights — typically its own fee terms — assigned by size and timing of commitment; NAV is computed separately for each class or series.
- Fund AdministratorThe service provider that keeps a Category III AIF's books, accounts for accruals, computes NAV and handles regulatory and tax reporting — an unregulated function in India that can be outsourced or done in-house.
- Independent ValuerThe valuer of a Category III AIF's unlisted holdings — not an associate of manager, sponsor or trustee, with 3 years' experience, and IBBI-registered with a professional membership or a CRA group entity.
- Valuation DayThe day, fixed in advance by a Category III AIF and disclosed in its offer documents, as on which its NAV is determined — at least monthly for open-ended funds and quarterly for close-ended ones.
- Off-Balance Sheet ExposureExposure a fund takes through leverage and derivative contracts to assets that are not its direct obligation — only margin and premium show in the books, but the fund bears the full risk and return.
- Amortized CostA debt security's purchase cost adjusted for the purchase discount or premium over its maturity — how a Category III AIF values unlisted securities with no ascertainable market, plus accrued interest.
- Series NAVThe NAV of one series of units within a class: Series Assets less Series Liabilities and Series Expenses on a Valuation Day, divided by that series' units and rounded to four decimals.
- Official Point of AcceptanceA location a mutual fund has formally designated to receive transaction requests, where the application is time-stamped — and that stamp, not the moment the investor handed the form over, decides which NAV applies.
- Beneficial InterestAn investor's share in a Category III AIF represented by the units it holds — the basis on which units are allocated and distributions or liquidation proceeds are paid out.
- Dividend Distribution TaxThe tax a mutual fund scheme itself deducted before paying a dividend, abolished from April 2020 — since when the payout has instead been taxed in the investor's own hands at their slab rate.
- Fair valuation principlesSEBI's ten principles requiring a mutual fund to value its holdings at realisable value, in good faith, under Board-approved and disclosed policies, so every investor entering or leaving gets a fair price.
- Entry loadThe former mark-up of a mutual fund's sale price over NAV, charged when an investor bought units. SEBI has banned it, so units are now sold at NAV, subject only to stamp duty.
- GatingA temporary restriction on mutual fund redemptions, allowed only in a market-wide crisis, for at most 10 working days in any 90 days — and never on the first Rs 2 lakh of any redemption request.
- Transaction periodThe window during which an interval mutual fund scheme turns open-ended, allowing subscriptions and redemptions, before closing again until the next scheduled window.
- UnitholderA mutual fund investor, represented by the number of units held, who owns a proportional share of the scheme's assets and shares in its profits or losses accordingly.
- GrandfatheringThe Budget 2018 provision that kept long-term gains on equity funds accrued up to 31 January 2018 tax-free, by treating the value on that date as the base for computing taxable gain.
- Stamp dutyA levy on mutual fund units from 1 July 2020: 0.005% of the amount invested on every issue of units — lump sum, SIP, STP, switch-in, IDCW reinvestment — and 0.015% on transfers.
- Scheme performance dashboardThe dashboard every AMC must publish on its website and update regularly, showing how each scheme has performed over various holding periods alongside its category, fund manager, benchmark, TER and portfolio.
- Non-traded securityA security (other than money market and debt) not traded on any stock exchange for thirty days before the valuation date, which the AMC must then value in good faith rather than at a market price.
- Equalisation reserveA component of a unit's sale price representing realised gains, set aside and usable later to pay a distribution — so part of a dividend can, in effect, be a return of the investor's own capital.
- Compounded returnThe single yearly rate at which an investment's starting value would have to grow, each year's growth earned on the year before, to reach its ending value over a stated number of years.
- Main portfolioSEBI's defined term for what is left of a mutual fund scheme once a segregated portfolio has been carved out of it — the scheme portfolio excluding the segregated portfolio.
- Valuation agencyAn independent agency whose valuation matrix mutual funds must use to price non-traded and thinly traded debt; there have to be at least two, and AMFI has appointed CRISIL and ICRA.
- Book value per shareEquity shareholders' funds as per the balance sheet divided by the number of equity shares issued and paid up — normally treated as the floor value of a going-concern business.
- SeriesA sub-division within a class of a Category III AIF's units — distinct and exclusive from any other series of the same class, created to identify a different set of investors, with its own NAV.
- High-Water MarkThe highest year-end NAV the fund has ever reached, net of operating, transaction and management costs — the manager earns no incentive fee until the NAV climbs back above it.
- Distributions to Paid-in CapitalCumulative cash actually distributed to investors divided by the capital they have paid in — the realisation multiple, and the one return measure a fund cannot flatter with its own valuations.
- Sum-of-the-partsValuing a conglomerate by valuing each business separately on its own appropriate multiple and adding the results, instead of applying one blended multiple to the group.
- Reference Hurdle NAVThe rupee NAV a close-ended AIF must reach before any incentive fee is earned — called-up capital compounded forward at the hurdle rate, year after year.
- Absolute-return benchmarkA fixed percentage return, set by the manager when the scheme launches, against which an absolute-return strategy is judged instead of a market index.
- Cost approachValuing a business from its assets less its liabilities — by book value, by what it would cost to replace, or by what it would fetch if broken up and sold.
- Secondaries marketThe sale of an existing investor's fund units or partnership interest to co-investors or outside buyers, usually at a negotiated discount to net asset value.
- Real Estate Investment TrustA SEBI-registered trust that pools investors' money into commercial real estate and lists its units on a stock exchange, so rent-yielding property can be bought in small lots and sold in a day.
- Change in control of the AMCWhen ownership of a mutual fund's AMC changes hands, SEBI and the trustees must approve it first and every unit holder must be offered at least 30 calendar days to exit at NAV with no exit load.
- Real estate mutual fund schemesA mutual fund scheme holding actual property: at least 35% of net assets directly in completed, unencumbered Indian real estate, and at least 75% in real estate assets and related securities.
- Short term deposits by a schemeA capped exception letting a mutual fund scheme place cash in a bank deposit — up to 20% of its net assets, for at most 91 days — only to pay redemptions or dividends.
- Exchange Traded FundA mutual fund scheme whose units are listed and traded on a stock exchange like a share, so you transact at live prices through the day instead of at one end-of-day NAV.
- Base Expense RatioThe management-and-administration slice of a scheme's cost, capped by the SEBI slabs — the first and largest of the four components that add up to Total Expense Ratio.
- Face valueThe denomination a company's capital is divided into and carried in its books — fixed, printed on the certificate, and the base on which dividend percentages and stock splits are computed.
- Pass-through vehicleThe structural fact that a mutual fund passes the risks and returns of its portfolio straight to unitholders, keeping nothing and promising nothing — which is why it is taxed once and cannot guarantee a return.
- Fund factsheetThe monthly scheme summary an AMC publishes voluntarily — portfolio, performance, risk measures and investment details in one document. It is an AMFI best practice, not a statutory requirement.
- Closed-end discountThe gap by which units of a listed close-ended (or interval) scheme trade below their NAV on the stock exchange. The workbook says there is no limit to it; it tends to narrow as maturity approaches.
- Credit riskThe risk that a borrower fails to meet its obligations on a debt instrument — the risk credit rating agencies exist to grade, and the one that triggers a segregated portfolio in a mutual fund.
- New Fund OfferThe period in which a mutual fund scheme's units are offered to the public for the first time, at a fixed NFO price rather than at NAV, and during which the registrar builds the scheme's first register of investors.
- Instant Access FacilityA facility that credits redemption proceeds to a resident individual investor's bank account on the same day, offered only in overnight and liquid schemes and only through the AMC's own website or app.
- Cut-off timeThe SEBI-prescribed clock time that, read together with the time stamp on the request, decides which day's NAV a mutual fund transaction is priced at.
- FATCA and CRSTwo cross-border tax transparency regimes — one American, one OECD — under which a mutual fund's registrar identifies foreign-taxable investors and reports their accounts to the CBDT for automatic exchange.
- Open-ended fundA mutual fund scheme with no maturity date that keeps selling and redeeming units directly after its NFO, at NAV-linked prices, so its number of units and unit capital change every day.
- Close-ended fundA mutual fund scheme that sells units only in its NFO, runs for a fixed period and redeems all units at maturity — in between, investors can exit only by selling on the stock exchange, where listing is compulsory.
- Direct and regular plansThe two routes into the same mutual fund scheme: a direct plan with no distributor and a lower expense ratio, and a regular plan that pays distributor commission — same portfolio, separate NAVs.
- On-going offerThe continuous, post-NFO period in which an open-ended scheme sells and redeems units at NAV-linked prices on an ongoing basis — the pricing mechanism the workbook shows keeps every investor's holding fair.
- Capitalization of earningsA SEBI-approved method for valuing an equity holding that has not traded for 30 days — using the price-earnings ratios of comparable traded securities, discounted for its lower liquidity.
- International equity fundA mutual fund scheme investing in shares listed outside India, giving an investor both an equity-market exposure and a currency exposure to the rupee's movement against the foreign currency.
- Composite CAGRThe blended CAGR SEBI requires for benchmark comparison when Total Return Index data is not available for the whole period — Price Return Index CAGR up to the date TRI began, spliced with TRI CAGR after it.
- Principally traded exchangeThe one stock exchange an AMC selects, and records its reasons for in writing, to value a security that trades on more than one exchange — used consistently until a documented change of exchange.
- Systematic Withdrawal PlanA standing instruction to redeem a set amount — or only the appreciation — from a mutual fund scheme at a chosen frequency, used to manufacture a regular income in retirement.
- CustodianThe SEBI-registered entity that holds a fund's securities in accounts of its own and settles its trades, so the assets sit somewhere other than with the manager who decides what to buy.
- Specialized Investment FundA mutual fund product line introduced by SEBI in 2024 for sophisticated strategies, with a minimum investment of Rs 10 lakh across all of an AMC's strategies — sitting between mutual funds and PMS.
- Fund of fundsAn AIF that invests in the units of other AIFs rather than directly in investee companies — buying diversification across managers and strategies, and paying two layers of fees for it.
- Management FeeThe fixed annual fee an AIF pays its investment manager for managing the fund — charged on committed capital in Category I and II funds and on gross NAV in Category III, regardless of performance.
- IPEV GuidelinesThe international best-practice guidelines for valuing unlisted private equity and venture capital investments at fair value, setting out seven widely used methods for valuing a portfolio company.
- Concentration riskThe risk that a few positions are large enough, against the fund's capital, that one loss damages the whole portfolio — capped by SEBI at 25% of investable funds for Category I and II AIFs and 10% for Category III.
- Leverage riskThe risk that borrowing or derivative positions magnify a fund's losses — which is why SEBI caps Category III leverage at two times NAV and permits Category I and II almost none.
- Post-money valuationA start-up's pre-money valuation plus the new money going in — the number that fixes what percentage of the company the incoming investor owns after the round.
- Net returnThe return on an AIF's NAV after fund expenses, costs and management fees — measured before incentive fees (pre-incentives) or after them (post-incentives, what the investor actually keeps).
- Open-ended AIFAn AIF scheme that offers units continuously with no fixed maturity and lets investors redeem at set intervals — permitted only for Category III AIFs, with a variable corpus.
- Suspension of redemptionsAn open-ended Category III AIF halting redemptions in exceptional circumstances, justified only in investors' best interest or by SEBI — with no new subscriptions accepted while it lasts.
- Dematerialised unitsAIF unit capital held in electronic form with a depository: every scheme must now issue units in demat only, each carrying its own ISIN against which the NAV is uploaded.
- Book Value approachThe first of the three asset-based valuation methods: value the company at the historical carrying cost of its assets and liabilities, giving a book value per share treated as the floor price.
- Offsetting positionsNetting a Category III AIF's long and short positions in the same stock, index or commodity with the same maturity, so that its leverage is measured on net rather than gross exposure.
- Capital appreciationThe gain made when the market value of an investment rises above what you paid for it — as distinct from income, which is the interest or dividend the investment pays you along the way.
- Fund-level leverageBorrowing or gearing taken by the AIF itself rather than inside a portfolio company — permitted for investment purposes only to Category III AIFs, and capped at 2 times NAV.
- Total Value to Paid-in CapitalA fund's investment multiple: cumulative distributions plus the residual value of unsold investments, divided by paid-in capital — equivalently, DPI plus RVPI.
- Kaplan-Schoar Public Market EquivalentA market-adjusted TVPI: capital calls, distributions and NAV compounded at an index's returns to the valuation date. Above 1 means the AIF beat the market; below 1 means it lagged.
- J CurveThe shape of a private fund's returns over its life: negative in the early investing years because of fees, expenses and unripened investments, then rising steeply as exits and distributions arrive.
- Central Recordkeeping AgencyThe intermediary that holds every NPS subscriber record — it issues the PRAN, unitises contributions at scheme NAV and sits between the subscriber, the pension funds and the trustee bank.
- Multiple Scheme FrameworkThe PFRDA framework, effective 1 October 2025, that lets non-government NPS subscribers hold branded pension-fund schemes alongside the existing Common Schemes under a single PRAN at each CRA.
- Unit Linked Insurance PlanA life insurance policy in which the premium, after the cost of risk cover and expenses, is invested in equity or debt funds chosen by the policyholder, so the maturity value is the fund value.
- Replacement Cost ApproachAn asset-based valuation that values a business at what it would cost to replace it as it stands today, including set-up costs — suited to businesses with high entry barriers or setting-up costs.
- Break-up Value ApproachAn asset-based valuation that measures what a company would fetch if it were shut down on the valuation date and sold in pieces — liquidation value of assets less settlement value of debt.
- Adjusted NAVThe value of an AIF measured as the cash investors would receive if every portfolio investment were realised at fair value on the valuation date, after taxes, fees, expenses, carry and other deductions.
- Mutual fundA trust registered with SEBI that pools money from many investors and invests it in securities on their behalf — not a different product from shares and bonds, but a different way of owning them.
- UnitThe share of a mutual fund scheme that an investor's money is translated into — typically carrying a face value of Rs 10, and worth whatever the scheme's NAV is on the day.
- Assets under ManagementThe total value of the money a scheme or a fund house manages — the current NAV multiplied by units outstanding — and the base on which the expense ratio is charged.
- SponsorThe person or firm that sets up the mutual fund — applies to SEBI for registration, executes the trust deed in favour of the trustees, and puts up the capital of the AMC.
- Asset Management CompanyThe company that runs a mutual fund's schemes day to day — appointed by the sponsor or trustees with SEBI's approval, and paid a fee out of the scheme rather than a share of its profits.
- Registrar and Transfer AgentThe SEBI-registered agency that keeps the investor records of a mutual fund — processing purchases and redemptions, updating folios and unit capital, and issuing account statements.
- IDCWThe renamed dividend option of a mutual fund scheme — a payout that is part income and part return of your own capital, which is why the NAV falls by exactly the amount distributed.
- Systematic Transfer PlanA standing instruction to move a fixed amount from one scheme into another of the same mutual fund at a set frequency — a withdrawal plan out of the source and a SIP into the target.
- Fixed Maturity PlanA close-ended debt scheme whose portfolio maturity is aligned to the scheme's own maturity date, so the investor who stays to the end has a reasonably visible outcome — though never a guaranteed one.
- Interval fundA scheme that is largely close-ended but opens for subscription and redemption during pre-specified transaction periods, with compulsory stock exchange listing to give an exit in between.
- Target Maturity FundA debt mutual fund designed to mature on a specific date, holding bonds that mature around the same time — minimising reinvestment risk and giving a more predictable return to a defined horizon.
- Liquid fundAn open-ended debt scheme investing only in debt and money market securities maturing within 91 days — among the lowest-risk mutual funds, used to park short-term surplus money.
- Fundamental attributesThe core features of a scheme — its investment objectives, policies and terms — on which investors relied when they invested. Changing them requires notice to every unit-holder and a no-load exit at NAV.
- Trail commissionThe commission an AMC pays a mutual fund distributor as a percentage of the current value of the investments they brought in, calculated daily and paid for as long as the investor stays invested.
- Unclaimed amountsDividend and redemption money a mutual fund investor never collected, held in a separate liquid plan — paid at prevailing NAV if claimed within 3 years, at the 3-year NAV if claimed later.
- Portfolio disclosureThe published list of the securities a scheme holds, with market values and ISINs — monthly within 10 days for all schemes, and fortnightly within 5 days, with yields, for debt schemes.
- Systematic Unit RedemptionAn NPS exit mode that redeems a fixed number of units every period over the chosen drawdown period — minimum six years — so the rupee payout moves with the NAV.
- Time stampingThe tamper-proof stamping of every mutual fund application with location code, machine identifier, serial number, date and time at the official point of acceptance — the record that decides which NAV applies.
- Scheme Re-Opening DateThe date after an open-ended scheme's NFO from which investors can buy new units or sell units back to the scheme at NAV-based prices. Close-ended schemes have no re-opening date.
- Ex-dividend NAVThe NAV of a scheme after an IDCW has been paid out, lower than before by the amount distributed. Reinvestment of the IDCW happens at this NAV.
- TriggerA standing instruction that automatically redeems or switches units when a market level, NAV, date or percentage change is reached — a one-time facility that ends once it has fired.
- Recurring expensesThe ongoing fees and commissions a mutual fund scheme pays its constituents, charged as a percentage of AUM and deducted before NAV is struck — so higher recurring expenses mean lower investor returns.
- Simple returnThe plain percentage change in the value of an investment over a period — (ending value minus beginning value) divided by beginning value — with no adjustment for time or compounding.
- Assured returns schemeA mutual fund scheme that promises a specific return, permitted only where a guarantor named in the Scheme Information Document undertakes to pay the shortfall if the scheme itself cannot.
- Cum-dividend NAVThe NAV of a scheme's units after a dividend is announced but before it is actually paid out or reinvested — the NAV still includes the value that is about to leave as dividend.
- Absolute returnThe plain rupee gain or loss from an investment relative to what was invested — simple to compute, but it ignores both the amount invested and the time taken to earn it.
- Dynamic bond fundA long-term debt mutual fund category that invests across durations, with the fund manager shortening duration when rates are expected to rise and lengthening it when rates are expected to fall.
- Gold ETFAn exchange-traded fund tracking domestic gold prices, backed unit-for-unit by physical gold of 99.5% purity or gold receipts, traded on the stock exchange like a share rather than held as jewellery.
- Multi-asset allocation fundA hybrid mutual fund category that must invest in at least three asset classes, with a minimum of 10% allocated to each — a diversification floor written into the scheme category itself.
- Equity mutual fundA mutual fund that invests in shares to pursue growth, professionally managed and diversified across large, mid or small caps, sectors and investment styles.
- Collective investment vehicleA structure that pools money from many investors and invests it together — in India, mutual funds, REITs, InvITs and AIFs, each following a trust-based model governed by SEBI.
- Unit capitalThe number of units a mutual fund scheme has issued multiplied by their face value — an accounting figure that records what investors contributed, not what their holding is worth today.
- Tracking errorThe gap between the return of a passive fund and the return of the index it is trying to replicate — the measure of how faithfully an index fund or ETF does its one job.
- SwitchA single mutual fund transaction that redeems units from one scheme (or option) and invests the proceeds in another on the same date — a redemption and a purchase rolled into one.
- Indicative NAVThe per-unit NAV of an ETF worked out from the current market value of its portfolio during trading hours, disclosed continuously on the exchanges where its units are listed and traded.
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