Glossary · Funds & Asset Management
Net Asset Value
The per-unit value of a mutual fund, calculated by dividing the total value of the fund's assets minus liabilities by the number of outstanding units.
01—What is Net Asset Value?
The definition — and what it means in practice.
Net Asset Value (NAV) is the per-unit value of a mutual fund. It is calculated by taking the fund’s total assets (such as shares, bonds and cash), subtracting its liabilities (such as fees payable and other expenses), and dividing the result by the number of units outstanding. NAV is usually expressed as a rupee amount per unit and changes as the value of the fund’s holdings and liabilities change.
NAV matters because it is the reference price used to track a mutual fund’s performance and to price investors’ transactions in units. If the fund’s portfolio rises in value, NAV generally rises; if it falls, NAV generally falls. Comparing NAV movement over time (and after fees) helps you understand what the fund is delivering, separate from how many units you happen to own.
If a fund has assets of Rs 1,000, liabilities of Rs 100 and 90 units, its NAV is (1,000−100)÷90 = Rs 10 per unit.
NAV = (Total Assets − Total Liabilities) ÷ Units Outstanding
Use the fund’s valued assets and liabilities for the same valuation point; units outstanding are the total fund units currently issued.
- NAV is a per-unit number, not the fund’s total size.
- NAV changes with the market value of holdings and with liabilities/expenses.
- Transactions in open-end funds are typically priced off the applicable NAV.
- A higher NAV does not automatically mean a “better” fund; performance depends on NAV growth and costs.
02—How net asset value works on the PSX
The Pakistan-specific rules, conventions, and numbers.
For many Pakistan investors, NAV is encountered through mutual funds and index funds that may hold Pakistan Stock Exchange (PSX) listed shares, government securities, or a mix of assets. Even if a fund invests heavily in PSX equities, you generally do not buy and sell the underlying shares yourself; your investment is in fund units priced using NAV.
NAV helps a PSX-focused investor compare a fund’s results with equity market benchmarks without needing to track every portfolio holding. When PSX share prices move, the value of a fund’s equity holdings changes, which can flow through to the fund’s assets and therefore its NAV. Looking at NAV over time is the practical way to observe how a fund’s PSX exposure has translated into unit value.
03—Common misconceptions
Where investors most often get this wrong.
A low NAV means the fund is cheaper and therefore a better buy.
NAV is per unit. A lower NAV may simply mean the fund started at a lower base or has more units outstanding; what matters is performance, risk and costs.
NAV is the same thing as a share price on the PSX.
NAV is calculated from a fund’s assets minus liabilities divided by units outstanding. A listed share price is set by trading in the market order book.
NAV only changes when the fund sells something.
NAV can change whenever the market value of the fund’s holdings changes or when liabilities and expenses accrue, even without any trading activity.
04—Using net asset value on BSL
Where this term shows up across the platform — with live data.
- Learn core terms around funds on our glossary.
- Compare PSX shares a fund might hold using stocks.
- Filter and review listed companies by sector with sectors.
- Track broad market context via the KSE-100 index.
05—Frequently asked questions
What investors ask about net asset value on the PSX.
Frequently Asked Questions
NAV is calculated as the fund’s total assets minus total liabilities, divided by the number of units outstanding. It results in a rupee value per unit that reflects the valued portfolio and the fund’s expenses and other payables.
NAV is the key reference for pricing mutual fund units, but the exact dealing price can depend on the fund’s dealing rules and any applicable charges. Conceptually, purchases and redemptions are priced off the relevant NAV for that dealing point.
Yes. If the market value of those stocks falls, the fund’s total assets can decline, which can reduce NAV. NAV can also be affected by other holdings, cash levels, and the fund’s liabilities and expenses.
No. NAV level by itself does not indicate quality or safety. Two funds can have very different NAVs due to different unit counts or histories; what matters is how NAV changes over time relative to risk and costs.
NAV is a per-unit value for a fund based on its net assets. Market capitalisation is the total market value of a listed company’s shares, typically calculated as share price multiplied by shares outstanding.
06—Related terms
Keep building the picture.
A pooled investment vehicle managed by a professional fund manager. Investors buy units in the fund, which then invests in a diversified portfolio of securities. In Pakistan, mutual funds are regulated by the SECP and distributed through asset management companies.
A mutual fund that continuously issues and redeems units based on investor demand, with the number of units varying daily. Most mutual funds in Pakistan operate on an open-end basis.
An investment fund that issues a fixed number of shares at inception. Unlike open-end mutual funds, its shares are not redeemed by the fund on demand but are bought and sold on the stock exchange like ordinary shares.
The total annual cost of operating a mutual fund expressed as a percentage of its average net assets. Includes management fees, administrative costs, and other operating expenses. A lower MER means a greater share of the fund's return flows to investors.
The process of distributing investments across different asset classes, such as equities, fixed income, cash, and commodities, to balance risk and return based on an investor's goals and risk tolerance.
A mutual fund designed to replicate the performance of a specific market index by holding the same securities in the same proportions. Offers broad market exposure at a lower cost than actively managed funds.
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