How do Mutual Funds determine their Unit Price?

A fund's Net Asset Value (NAV) represents the price per unit. The NAV is equal to the market worth of assets held in the portfolio of a Fund, minus liabilities, divided by the number of units outstanding.

Current Market Value of all the Assets – Liabilities
Total Number of Units Outstanding

In order to determine the sale price of the unit, sales load is added to the NAV. In case there is no sales load, the NAV will be the sale price as well as the redemption price. The sale and redemption price is declared on a daily basis by the Funds and can be viewed on their websites.

Dividend Payment

Dividend is paid in the form of cash on monthly/quarterly/annual basis depending upon the category of the fund and from AMC to AMC. Any investor who wishes to re-invest the dividend amount has the option to inform the AMC beforehand so the dividend amount will be re-invested and new units will be issued.

Capital Gains Tax

Mutual funds are required to withhold Capital Gains Tax (CGT) as per below:

  • 12.5%, where holding period of a security is less than twelve months.
  • 10%, where holding period of a security is twelve months or more but less than twenty-four months.
  • -Zero, where holding period of a security is twenty-four months or more.
Risk Disclaimer

All investments in mutual funds are subject to market risks. The NAV of units may go up or down based on market conditions. Past performance is not necessarily indicative of the future results. The investors are advised, in their own interests, to carefully read the Offering Document, in particular the investment policies and risk disclosure and warning statements in their respective Offering Document.