Mutual Fund NAV

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AW10

Well-Known Member
#5
#5
If u observe the data in the link that u have provided, then NAV is same as SAPrice.
As per my interpretation
NAV = net value of asset
REPrice = Repurchase price = i.e price at which AMC will buy it from you. i.e the price that u will get, if u go to sell your holding.

SAPrice = Sale Price = i.e. price at which AMC will sell it to you when u go to buy it. (which is same as NAV but it could be different if they decide to sell at discount).
 
P

p_rajivadekar

Member
#6
#6
AW10 said:
If u observe the data in the link that u have provided, then NAV is same as SAPrice.
As per my interpretation
NAV = net value of asset
REPrice = Repurchase price = i.e price at which AMC will buy it from you. i.e the price that u will get, if u go to sell your holding.

SAPrice = Sale Price = i.e. price at which AMC will sell it to you when u go to buy it. (which is same as NAV but it could be different if they decide to sell at discount).
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NAV and SELL price are always equal. (sell price means the price which investor payes to Mutual fund for buying units). As per new norms MF can not charge any entry load. hence the price is same as nav. Repurchase price factors in load. which may differ from scheme to scheme(Repurchase price is the price which an investor gets when he wants to take back his amount)
 
A

AW10

Well-Known Member
#7
#7
Yes you are right. NAV = Sale Price in most cases.

But chk out the following quote from wiki.. There are times when this equation does not hold true.

Closed-end funds (the shares of which are traded by investors) may trade at a higher or lower price than their NAV; this is known as a premium or discount, respectively.
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Similarly if we have a fund, which is holding illiquid assets, then NAV will be generally determined by book value of those assets, but market value of those asset will be very different (like fund holding junk bonds of Greece which they can't sell at NAV).. hence if they have to be sold at discount.

Happy Investing
 
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p_rajivadekar

Member
#8
#8
AW10 said:
Yes you are right. NAV = Sale Price in most cases.

But chk out the following quote from wiki.. There are times when this equation does not hold true.



Similarly if we have a fund, which is holding illiquid assets, then NAV will be generally determined by book value of those assets, but market value of those asset will be very different (like fund holding junk bonds of Greece which they can't sell at NAV).. hence if they have to be sold at discount.

Happy Investing
Click to expand...
The quote which you are talking about is for when the scheme is traded in the market. It can have any value. Even there can be price rigging as happened in one of Indian mutual fund scheme. When a fund declares NAV it is always a sale price and their is no component of premium or discount.
As regards to share price and NAV let us not get confused, its the price by which NAVs are derived at. It has got nothing to do with premium to NAV/Discount to nav. All factors are reflected before the nav of any fund is arrived at.
 
A

AW10

Well-Known Member
#9
#9
I think, we have two different perspective. While you are taking indian MFs, Equity MFs.. and I am trying to address the concept that theoratically /and practically there are cases when it can be different. I have given example of those scenarios as well.

May not be relevent for Indian context at current stage, but they are valid cases.

Happy Investing.
 
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