Relationship between a mutual fund performance and its Net Asset Value
The Net Asset Value of a mutual fund is a measure of its performance as it reflects the total value of the fund’s assets minus its liabilities, divided by the number of units outstanding. Therefore, the NAV of a mutual fund is directly related to its performance. Relationship between a mutual fund performance and Net Assets Value.
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When a mutual fund’s assets increase in value, its Net Assets value also increases, indicating that the fund has performed well. Similarly, when the fund’s assets decrease in value, its NAV decreases, indicating a decline in performance. Additionally, the NAV of a mutual fund is used to calculate the value of an investor’s holdings in the fund, which can impact the investor’s returns. Therefore, it is important to monitor the NAV of a mutual fund as an indicator of its performance.
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