Blogs

What is Net Asset Value (NAV)?

By Fateen Tahseen Alam

Analyst

EDGE AMC Limited

Posted on: 26 Dec, 2023

Last Updated: 13 August, 2026

If you've ever looked at a mutual fund and seen a number quoted per unit, you've encountered Net Asset Value (NAV). It's one of the most important numbers in fund investing, yet it's often misunderstood. At EDGE Asset Management Limited (EDGE AMC), we believe informed investors make better long-term decisions. So, here's a clear, practical breakdown of what NAV means, how it's calculated, and why it matters to you.

What Does NAV Mean?

NAV, or Net Asset Value, represents the per-unit value of a mutual fund. In simple terms, it tells you what one unit of a fund is worth on a given day.

NAV Formula

The calculation is straightforward:

NAV per unit = (Total Assets of the Fund − Total Liabilities of the Fund) ÷ Total Number of Units Outstanding

• Assets include the market value of everything the fund holds — listed shares, bonds, cash, and other securities — plus any receivables.
• Liabilities include the fund's expenses, management fees, and any other amounts owed.

Subtract liabilities from assets to get the fund's net worth, then divide by the number of outstanding units. The result is the value of a single unit which is the fund's NAV.

Why Does NAV Change Every Day?

A fund's NAV isn't fixed. It moves with the market value of the securities inside the portfolio. When the stocks or bonds a fund holds rise in value, NAV goes up, and when they fall, NAV goes down. That's why NAV is calculated and published regularly instead of being set once and forgotten. 

For funds managed by EDGE AMC, NAV is calculated and disclosed publicly on a regular basis, in line with the requirements of the Bangladesh Securities and Exchange Commission (BSEC). You can find the NAV history of any of the EDGE funds on their respective pages or check out our regularly updated live NAV page. This regular disclosure is central to how mutual funds operate in Bangladesh — it ensures every investor, whether they hold one unit or thousands, has access to the same fair, up-to-date valuation.

To better understand how a mutual fund works, check out this article. 

NAV vs. Market Price: Know the Difference

This distinction trips up a lot of new investors, so it's worth spelling out clearly.

• Open-end mutual funds: Units are typically bought and sold at NAV, sometimes with a small sales or repurchase charge. This means the price you pay to invest — or receive when you redeem — is directly tied to the underlying value of the fund's holdings. 
• Closed-end funds: These trade on the stock exchange like shares, so their market price can differ from NAV. A fund might trade at a premium (above NAV) or a discount (below NAV), depending on investor demand and sentiment. For closed-end and listed funds, the price you pay in the market isn't always the same as the fund's actual underlying value — so it pays to check both numbers before you trade. 

To learn more about the different types of mutual funds, follow this link.

Why NAV Matters to Investors

1. It reflects real value, not speculation.
   Unlike a stock price, which can swing on short-term sentiment, NAV is grounded in the actual, calculated value of the fund's underlying assets.
2. It lets you track performance.
   Comparing a fund's NAV over time shows how your investment has grown (or contracted). A rising NAV trend, especially over a long horizon, generally signals sound underlying performance. If you want to see a real-world illustration of NAV growth tracked over time, check out this article. 
3. It determines your redemption value.
   When you sell or redeem units in an open-end fund, the amount you receive is based on the prevailing NAV, minus any applicable exit load or charges. You can find EDGE's current fund NAVs, updated regularly, on our live NAV page.
4. It promotes transparency.
   Regular NAV disclosure means fund managers can't obscure how a fund is really doing — it keeps everyone, the asset manager included, accountable to the numbers. To learn more about the safeguards built into mutual funds, see this article. 

Frequently Asked Questions About NAV

Q: How often is NAV calculated?

A: For most open-end mutual funds in Bangladesh, NAV is calculated and publicly disclosed at least once a week, in line with BSEC requirements. Some asset managers, including EDGE AMC, publish it more frequently. 

Q: Is a higher NAV better than a lower one?

A: Not necessarily. NAV alone doesn't indicate whether a fund is a good investment — a BDT 50 NAV isn't inherently "better" than a BDT 10 NAV. What matters more is how the NAV has grown over time and how the fund has performed relative to its benchmark and peers.

If you want to compare the EDGE funds on metrics such as fund strategy and cumulative return since inception among others, kindly click here. If you want to see a real-world illustration of NAV growth tracked over time, check out this article. 

Q: Can NAV go down?

A: Yes. NAV reflects the market value of the fund's underlying holdings, so it can fall if those holdings lose value. This is a normal part of investing in market-linked instruments.

Q: At what price do I buy or sell mutual fund units?

A: For open-end funds, units are generally bought and sold at the prevailing NAV, sometimes with a small sales or repurchase charge. Closed-end funds trade on the stock exchange, so their market price may differ from NAV.

Q: Where can I check a fund's latest NAV?

A: Asset managers are required to publish NAV regularly on their websites and through other disclosed channels. It's also often available via the BSEC and stock exchange websites for listed funds.

You can find EDGE's latest NAVs on the live NAV page. 

Q: Is NAV the same as a fund's return?

A: No. NAV is a snapshot of per-unit value on a given day, not a return figure. To calculate return, you compare NAV (plus any distributions) at two points in time — for example, the start and end of a year.

Q: Does a fund's NAV include dividends already paid out?

A: NAV reflects the fund's current assets and liabilities at a point in time. When a fund distributes dividends, that amount leaves the fund's assets, so NAV typically drops by roughly the distribution amount on the payment date — it doesn't mean the fund lost value.

Q: Why do two funds with similar strategies have very different NAVs?

A: NAV depends on unit price history and unit issuance, not just performance — a fund that has been running longer or has issued units differently can have a very different NAV from a newer fund, even with similar strategies. Compare growth rates, not raw NAV numbers, when evaluating funds side by side.

Links

• What is a Mutual Fund?
• EDGE AMC Mutual Fund Guide
  
• Different types of mutual funds
  
• EDGE AMC FAQ page
  
• Compare the EDGE funds