Mutual funds are An investment tool that is different from other investment tools. in this tool Price volatility is not directly determined through price action. But as a result of the split between the mutual fund’s net asset value (NAV) and the number of related mutual funds circulating in the market.

Because of the importance of this NAV factor, it is important for mutual fund investors to know what NAV is and how it works. Check out the comments in the section below.

Understanding mutual fund net worth

Net asset value (NAV) is the total value of wealth (assets) owned by an investment manager. This value is obtained by adding all of the company’s assets minus liabilities. In English, this word is often referred to as net asset value (NAV) or Assets under management (Aum).

The formula for net activity value is NAV = (Shares + Bonds + Other Securities)- Operating Expenses.

For example, an investment manager owns stocks, bonds, and other securities with a value of 150,000, 240,000, and 100,000, respectively. If the company’s operating expenses are 90,000, the NAV is:

NAV = (Shares + Bonds + Other Securities)- Operating Expenses

NAV = (150,000 + 240,000+ 100,000) – 90,000

NAV = 490,000 – 90,000 = 400,000.

different from the price of stocks, bonds and other securities that can fluctuate throughout the day according to market conditions A mutual fund’s net asset value changes only once per day. This change in NAV value is normally agreed upon by the investment manager and relevant authorities prior to the closing of the daily stock exchange schedule. Risk from daily market changes only. Instead of every market change minutes or seconds, such as stocks and bonds

The Role of Net Asset Value in Mutual Funds

At least two of NAB’s roles in mutual funds are:

1. It is an indicator of mutual fund pricing.

The mutual fund price is derived from the NAV value divided by the number of mutual funds circulating in the market or NAV per participating unit. Therefore, if the NAV value changes, the price of the mutual fund will also change. If the change is positive Investors will receive additional capital. while if the movement is negative Investors will receive capital losses.

For example, if a mutual fund’s net asset value is 400,000 while the number of mutual funds circulating in the market is 1,000 units, the mutual fund price (NAV/unit) will be 400,000/1,000, which is 400 rupiah per unit.

It turns out that the next day The share price in which the investment manager is involved goes down, so the mutual fund’s NAV is reduced from 400,000 to 390,000. 390,000/1,000 which is equal to 390 rupiah per unit and investors will get capital loss.

2. NAV determines investor confidence.

Indirectly, the size of the NAV also represents the level of investor confidence in the mutual fund product and related investment managers. Generally, the higher the NAV value, the higher the level of investor confidence in this instrument. and vice versa

Therefore, customers tend to trust more. Mutual fund manager with the largest NAV ..

The size of a company’s NAV-to-expense ratio also reflects the efficiency of an investment manager’s performance. This analogy is called expense ratio. smaller expense ratioInvestment managers are more efficient at managing money collected in mutual funds.

How to calculate profit from mutual fund’s net asset value

As mentioned above, NAV plays an important role in calculating mutual fund profits. So how to calculate return on investment based on this variable? There are the following methods

1. Get NAV per unit

Before buying the fund You’ll need to know the NAV per unit first. NAV per unit is derived from the quotient between the net asset value (NAV) and the number of working capital funds.

Don’t worry, you don’t need to calculate your NAV manually and manually. Information about the NAV and the number of revolving funds is available in each mutual fund fact sheet issued by the investment manager. You just divide the numbers with a calculator.

2. Reduce NAV per unit when buying and selling

when selling mutual funds Make sure you also know the NAV per unit value, the goal is that you succeed in getting the required funding.

For example, investor A buys 100,000 investment units in mutual fund B when NAV and mutual funds outstanding are 700,000 and 1,000,000 respectively, so NAV per investor A unit when purchasing B is 0.7 Rupiah. is 0.7 x 100,000 = 70,000

Seeing positive market conditions, Investor A will sell the instrument only if its NAV is 1,200,000 and the amount is 1,000,000. Therefore, the funds received from Investor B is 1,200,000 x 1,000,000 = 1.2 Rupiah per unit, or a total of 120,000 (1.2 times 100,000)

Therefore, the profit on investment received from investor A is 120,000-70,000 = 50,000 or 0.5 per unit. Note that this advantage only comes from . capital gain Just. Mutual fund investors will receive dividends and coupons if the issuer.

James Chen on the page Investopedia It states that profit from investing in mutual funds cannot be calculated from the actual difference in value between NAV per unit in buying and selling alone. This is because the intrinsic value of NAV will certainly decrease as investment managers distribute dividends and coupons to investors. Therefore, profit from mutual funds should be calculated accordingly. compound growth rate per year (CAGR) or the ratio of investment value growth for more than 1 year


Net asset value (NAV) is the total amount of funds managed by the mutual fund’s investment manager after deducting liabilities. This variable is an important determinant in determining the trustworthiness of an investment manager and the return on investment of this tool.


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