I've just noticed that most people who start investing in funds often get confused about NAV, so I want to share my understanding.

Simply put, NAV or Net Asset Value is the true value of the assets held by the fund each day. Think of it like this: if you take all the assets the fund owns, subtract liabilities, and then divide by the total number of investment units, you'll get the NAV per unit, which is the buy/sell price for investors.

What's interesting is that NAV per unit and stock prices seem similar but are actually very different. Stock prices are the result of negotiations between buyers and sellers in the market, fluctuating based on supply and demand. NAV, on the other hand, reflects the true value of the assets based on the previous day's closing prices, more like the book value per share of a stock.

The calculation of NAV isn't complicated. The formula is: assets held at market value, plus accumulated returns and cash, minus expenses and liabilities, then divided by the number of units. For example, if Fund Z owns a hotel worth 10 million baht, has 1,000 shares of stock A priced at 1,000 baht each, no liabilities, and 200,000 units outstanding, the NAV would be 11 million baht, and the NAV per unit would be 55 baht.

When the value of the assets held by the fund increases, the NAV also rises, and unit holders profit. Conversely, if the asset value decreases, the NAV drops, and unit holders incur losses.

The key point of looking at NAV is to assess whether the fund is managing its assets well. If NAV grows well over the long term compared to similar funds, it indicates good management. On the other hand, if NAV remains flat or grows slowly, it might suggest poor management.

But be careful: the NAV per unit you see today is from the previous day. The actual trading price isn't known until the next day when the new NAV is announced. Also, a high NAV per unit doesn't necessarily mean the fund is expensive; it could be due to high asset value or a small number of units. Therefore, when choosing a fund, you should also consider the quality of assets and investment policies.

Finally, NAV is important for fund investors because it determines the buy/sell price and affects our profit or loss. Fully understanding NAV helps us make better investment decisions and predict returns more clearly.