NAV Calculation
The market value of investments
Plus(+): Current assets and other assets
Plus(+): Accrued income
Less(-): Current liabilities and other liabilities
Less(-): Accrued expenses/Dividend accrued but not received
Net Assets — (Divided by) Total number of Units Outstanding —
Net Asset Value (NAV)
Net Asset Value (NAV) = (Assets – Debts) / (Number of Outstanding units)
• SEBI has banned entry loads w.e.f 1st August, 2009. So, the Sale Price needs to be the same as NAV.
• Exit loads have to be credited back to the scheme immediately i.e. they are not available for the AMC to bear selling expenses.
• Transaction chargers for 1st time investor is Rs 150, other than 1st time, it is Rs. 100, for amounts greater than Rs. 10000
• In case of SIP, the Transaction Charge(s) will be deducted in four equal installments.
• The transaction charge, if any, shall be deducted by the AMC from the subscription amount.
• Initial issue expenses is Not to be charged to scheme, it has to be borne by AMC.
• Expenditure in excess of the prescribed total expense ratio limit (including brokerage and transaction cost, if any) shall be borne by the AMC or by the trustee or sponsors.
• Mutual funds/AMC’s may charge service tax on investment and advisory fee to the scheme in addition to the maximum limit of total expense allowed for the scheme.
• Service tax on expenses other than investment and advisory fee, if any, is to be borne by the scheme within the maximum limit of total expense allowed for the scheme.
• EXPENSES CANNOT BE CHARGED TO THE SCHEME
1) Penalties and fines for infraction of laws.
2) Interest on delayed payment to the unit holders.
3) Legal, marketing, publication and other general expenses not attributable to any scheme(s).
4) Fund Accounting Fee.
5) Expenses on investment management/general management.
6) Expenses on general administration, corporate advertising and infrastructure costs.
7) Depreciation on fixed assets and software development expenses.
Recurring Expenses Limits:
| Net Assets | Equity | debt |
| first 100cr | 2.5 (updated (1.75*) | 2.25 (1.5*) |
| 100c -300cr | 2.25 (1.5) | 2 (1) |
| 300-600cr | 2 (1) | 1.75 (.75) |
| above 700 cr | 1.75 (0.75) | 1.5 (0.5) |
• In case of a Fund of Funds scheme, the total expenses of the scheme including a weighted average of charges levied by the underlying schemes shall not exceed 2.50% of the daily net assets of the scheme.
• In case of an index fund scheme or exchange-traded fund, the total expenses of the scheme(including investment and advisory fees) shall not exceed 1.50% of the daily net assets.
• AMC can charge additional recurring expenses If the new inflows from beyond top 15 cities are at least
a) 30% of gross new inflows in the scheme or
b) 15% of the average assets under management (year to date) of the scheme, whichever is higher
• Funds can charge the additional expense of up to 30 basis points on daily net assets of the scheme.
• Daily net assets x 30 basis points x New inflows from beyond top 15 cities_
365 X Higher of (a) or (b) above
• For Dividend distribution, Valuation gains are ignored. But valuation losses need to be
adjusted against profits. It means that dividend is paid out of real profits, after providing for all possible losses.
• NAV for equity and balanced funds is to be calculated up to at least 2 decimal places.
• NAV is to be calculated up to 4 decimal places in the case of index funds, liquid funds and other debt funds.
• Wherever security is traded in the market on the date of valuation, its closing price on that date is taken as the value of the security in the portfolio.
• If the security is not traded on a particular date on any stock exchange, then the price at which it is traded on the principal stock exchange or any other stock exchange on the earliest previous day will be used for valuation provided such date is not more than 30 days prior to the valuation date.
• Where equity shares of a company are not traded in the market on a day, or they are thinly traded, a formula based on Earnings per Share of the company Book Value and Valuation of similar shares is used for the valuation.
• Debt securities that are not traded on the valuation date are valued on the basis of the yield matrix prepared by an authorized valuation agency. It is based on the Credit rating of the security and Maturity profile.
• Where individual security that is not traded or thinly traded, represents more than 5% of the net assets of a scheme, an independent valuer has to be appointed.
• AMFI has appointed third party valuation agencies (currently CRISIL and ICRA) to provide security level pricing of fixed income securities with a maturity greater than 60 days in order to achieve uniform valuation by all AMCs.
• The mutual fund trust is exempt from tax but the trustee company will, however, pay tax in the normal course on its profits.
• STT on equity Oriented schemes of mutual Fund Particulars Rates (in percent) Payable by:
Purchase of units of equity-oriented mutual fund NIL Purchaser
Sale of units of equity-oriented mutual fund 0.001 Seller
•• Dividends in the hands of the investor are tax-free.
• There is no TDS on the dividend distribution or re-purchase proceeds to resident investors.
Investments in mutual fund units are exempt from Wealth Tax.
Cut Off Time
Liquid funds 2 PM: before 2 PM previous day NAV after 2 PM NAV of the business day.
Equity & Debt funds 3 PM purchase above below 2 lakhs same NAV next business day NAV after 3 PM
above 2lakhs irrespective of receive time nav of business day when funds available for utilization.
for redemptions equity, debt, and liquid: same day of received before cutoff time 3 PM. next if after 3 PM or cutoff time.
NAV Publish time 9 PM Equity
