How is NFO NAV calculated?
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The NAV (Net Asset Value) of a New Fund Offer (NFO) is determined by a simple formula:
NAV = (Total Assets – Liabilities) Γ· Total Outstanding Units
During the NFO period, most mutual funds set a fixed offer price, usually Rs. 10 per unit. However, once the NFO period ends and the fund starts operating in the market, the NAV fluctuates daily based on the value of the fund’s underlying investments.
In short, while the initial price is fixed, the NAV changes post-NFO depending on market movements and the fundβs performance.