Understanding Mutual Fund NAV: Myth vs Reality for Long-Term Growth

One of the most persistent misconceptions among new investors is comparing NAV prices like stock share prices. A mutual fund with an NAV of ₹10 is NOT cheaper or better value than a mature fund with an NAV of ₹500.

Net Asset Value simply reflects the total market value of all underlying equities held by the scheme divided by the total number of outstanding investor units.

What matters is the percentage capital appreciation of the underlying basket. If both funds' underlying stocks grow by 15%, both investors earn an identical 15% return regardless of starting NAV.