Consider a mutual fund that manages a portfolio of securities worth ₹ 240 million. Suppose the fund owes ₹ 8 million to its investment advisors and owes another ₹ 2 million for wages, rent and another expenses. The fund

(i) The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). In simple words, NAV is the market value of the securities held by the scheme. Mutual funds invest the money collected from investors in securities markets. Since market value of securities changes every day, NAV of a scheme also varies on day-to-day basis. (ii) The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. Net Asset Value = Net Asset of the Scheme/ Number of units outstanding Net Asset of the Scheme = Market value of investments + Receivables+ other accrued income+ other assets - Accrued Expenses- Other Payables- Other Liabilities (iii) Net Asset Value = ₹ 240 million - ₹ 8 million - ₹ 2 million / 5 million Shares = ₹ 230 million / 5 million Shares = ₹ 46