NAV Return

Posted in Finance, Accounting and Economics Terms, Total Reads: 325

Definition: NAV Return

NAV return is the change in the NAV (Net Asset Value) of a mutual Fund or an ETF over a period of time. This NAV return is most often different from the return that the investors would realise from the Mutual Fund or ETF whichever instrument they have invested in. This is because these products generally trade at a discount or at a premium to the value of the assets present in the portfolio or the price of the fund.

Investors mostly prefer to monitor the NAV return rather than the total return. This is because, NAV return ignores the effect of the market volatility which in turn causes the funds to trade at a premium or at a discount to their Net Asset Value (NAV). Thus it is free from market fluctuations and hence is a better measure of performance of the Fund.


The above figure shows the performance of SBI fund and compares it with the performance of the benchmark. We can see that the fund has been outperforming the benchmark for most of the time. Thus the performance of the fund can be analysed and compared with benchmarks for monitoring purpose.



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