I just noticed that more people are asking about what NAV is in investment fund groups. If you understand this number well, it can make investing in funds much easier.

Let's talk about NAV, which reflects the true asset value of the fund. It stands for Net Asset Value or the total net worth of assets. This number is calculated by taking all the assets the fund holds and subtracting liabilities. It is updated daily based on real market prices. It’s like seeing the true value of the fund itself.

And NAV is the number that, when divided by the total number of units, gives the NAV per unit. This is the actual price used to buy and sell fund units. This is different from stock prices because stock prices are determined by negotiations between buyers and sellers in the market. But NAV per unit only reflects the true asset value of the fund.

The calculation method is not very complicated. Take the assets at market value, add accumulated returns and cash, then subtract expenses and liabilities. This gives the fund’s NAV. Divide by the total number of units to get NAV per unit. For example, if a fund has total assets of 11 million baht and 200,000 units, the NAV per unit would be 55 baht.

The benefit of using NAV is that it’s a useful tool to evaluate how well a fund is managed. If NAV grows steadily and faster than similar competing funds, it indicates the fund is skilled. Conversely, slow or stagnant NAV growth can be a warning sign.

But be cautious about several points. First, the NAV you see now is from the previous day; the actual trading price is only known after the day ends. Second, a high NAV per unit doesn’t mean the fund is expensive because it only reflects asset value, not whether it’s costly or cheap. You need to consider asset quality and investment policy as well. And finally, some types of funds, like leasehold funds, may see NAV decrease to zero when the contract expires.

In summary, NAV is an important figure that helps us understand the true value of a fund and where our profit or loss comes from. Once you understand this, investing in funds will become much more confident.