What is the significance of a fund’s Net Asset Value (NAV), and how is it calculated on a daily basis?

The Net Asset Value (NAV) represents the per-unit price of a mutual fund and is crucial for investors as it reflects the fund’s current market value. NAV is calculated daily at the market’s close by subtracting the total liabilities of the fund from its total assets and then dividing the result by the number of outstanding units. NAV = (Total Assets - Total Liabilities) ÷ Number of Units Outstanding. It helps investors understand how much each unit of the fund is worth. A rise in NAV indicates growth in the fund’s investments, while a fall shows a decline. However, NAV alone doesn't reflect fund performance, as returns depend on both NAV appreciation and dividends received.