The computation of NAV, valuation of securities / assets, accounting policies and standards would be in conformity with the SEBI (Mutual Funds) Regulations, 1996 and guidelines issued from time to time. The NAV per unit shall be calculated as follows:
The NAV arrived shall be rounded off up to four decimals for index, debt, liquid/money market schemes as per regulations. It should be two decimals for equity oriented & balanced fund schemes.
Assume that the Market or Fair Value of Scheme’s investments is Rs. 1,00,00,000; Current assetof the scheme is Rs. 25,00,000; Current Liabilities and Provisionsis Rs. 15,00,000 and the No. of Units outstanding under the scheme are 5,00,000.
Thus, the NAV will be calculated as:
Therefore, the NAV of the scheme is Rs. 22.0000*
Since the fund do not charge any Entry Load, the Purchase price or “Sale Price” is same as NAV of the fund disclosed on daily basis. Therefore, entry load, if any shall be charged as a percentage of Net Assets Value (NAV) for calculating Sale Price i.e. applicable Entry Load (if any) as a percentage of NAV will be added to NAV to calculate “Sale Price”. In other words, the following formulae shall be used:
SALE PRICE= Applicable NAV x (1+Entry Load,if any)
An investor invests Rs. 20,000/- and the current NAV is Rs.20/-. The entry load levied by the scheme is Nil i.e.0%.
Therefore, Sale price at which the investor invests = Rs.20.00 *(1 + 0%) = Rs.20.00.*
For calculating the Repurchase Price, exit load charged to the scheme is subtracted i.e. applicable Exit Loads as a percentage of NAV will be subtracted from NAV to calculate Repurchase Price. The formula for calculation of Repurchase Price would be:
REPURCHASE PRICE= Applicable NAV x (1-Exit Load,if any)
An investor invests Rs. 20,000/- and the current NAV is Rs.20/-. The exit load levied by the scheme is 1.0% if redeemed/switched within 1 year from the date of allotment.
Therefore, the Repurchase Price will be = Rs.20.00 *(1 – 1.0%) = Rs.19.80.
1. It is assumed in the above illustration that the Investor redeems his investments within the applicable exit load period. No exit load will be levied after the completion of period of applicable exit load.
2. Different Schemes may have different exit load structures. Investors are requested to refer the Scheme documents / AMC website to know the latest exit load structures
3. Present SEBI regulations do not permit levy of entry load.
4.* The NAV arrived shall be rounded off up to four decimals for index, debt, liquid/money market schemes as per regulations. It should be two decimals for equity oriented & balanced fund schemes.