Improvement in net asset value (NAV) per unit of mutual funds

As the fiscal year approaches its end with about a month remaining, the Net Asset Value (NAV) per unit of listed mutual funds has improved. Despite the increase in NAV, the data shows that these listed funds can still be purchased at a discount rate. According to the data provided by the share screening software ‘Smart Wealth Pro,’ all funds are available in the market at a discount rate until June 1. This means their unit price is lower than the NAV. The return obtained by dividing the total assets of the funds by the issued units is the Net Asset Value (NAV) per unit. If the market price is lower than the NAV, it is considered undervalued, referred to as the discount rate. Conversely, if the market price is higher than the NAV, it is considered overvalued.

The NAV of the funds increased as the market saw some improvement in June. A large portion of their investment is in the stock market. Therefore, fluctuations in the market also affect the NAV of the funds. It is very positive to see an improvement in their NAV as the fiscal year approaches its end. This is because these mutual funds distribute dividends from the profits of the current fiscal year in the coming year. If the NAV is less than NPR 10, they cannot distribute dividends.

Experts state that it is very good to see the NAV increase and to be able to buy fund units at a discount rate in the market. Among these, NIBL Growth Fund is available at a 21.06% discount rate, according to Smart Wealth. Its NAV is NPR 10.16, while the unit price is NPR 8.02. Second, Laxmi Value Fund-2 can be bought at a 20% discount. Its price is NPR 8.10, while the NAV is NPR 10.18.