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If schemes in the same category of different mutual funds are available
shouldn't investors choose a scheme with lower NAV
suppose scheme A is available at an NAV of Rs.15 and another
scheme B at Rs.90
Both schemes are diversified equity oriented schemes
the investor has put rupees nine thousand in each of these kids
he would get six hundred units
nine thousand divided by fifteen in scheme A and
hundred units ie.nine thousand divided by nine in scheme B assuming
that the NAV of both the schemes go up by ten percent
The NAV of scheme A would go up to Rupees sixteen point five
and that of scheme B to rupees ninty-nine
Thus the market value of investments would be rupees nine thousand nine
hundred
that is hundred into ninty-nine
the investor would get the same return of ten percent on his investment in each
of the schemes thus lower or higher NAV of the of the schemes and allotment of
higher or lower number of units within the amount an investor is
willing to invest should not to be the factors for making investment decisions
on the other hand it's likely that the better managed scheme with a higher NAV
may give higher returns compared to a scheme which is available at a lower
NAV 0:01:42.300,0:01:45.710 But is not managed efficiently therefore
the investor should give more weightage to the professional management of the
scheme and its performance track record
Instead of lower NAV
he may get higher number of units at a lower NAV but
the scheme may not give higher returns if it's not managed efficiently
mutual fund investments are subject to market risks read all scheme related
documents and information carefully before investing