What is the full form of NAV in the Share Market?
The NAV full form in the share market is Net Asset Value. The performance of the share in the market is denoted by its NAV per unit. NAVs of the mutual fund schemes are declared at the end of every trading day after markets are closed, in concurrence with the SEBI regulations.
Reasons why investors should consider NAV while trading:
Most of the investors consider the net value of an asset to be the same as that of the price of an equity share. However, the calculations differ, and only the liquid assets of the company are included to determine the price of the equity shares. In order to calculate the NAV, it is important to take both the liquid and the non-liquid assets into account. NAV is an important tool to make appropriate decisions about the funds that the investors choose to invest in.
Relationship between NAV and its performance of a fund:
Some investors believe that the NAV is the same as that of its stock price. They also presume that the funds that have a lower asset value are cheap and are also better investment options. But there is not correlation between the NAV and the performance of the fund. Also, if the fund has a low NAV, it need not be a comprehensive investment.