What is the fund unit valuation method?

Funds are valued every business day by calculating its NAV (Net Asset Value) per unit. This is calculated by adding up the current value of all shares, debentures, trust certificates, repos, other securities and cash in its portfolio. After subtracting out certain expenses of running the fund (e.g. Management fee, Trustee fee, Custodian fee and other operating expenses), the final figure is divided by the fund’s total number of units in issue to arrive at the NAV per fund unit. For example, assume you will get 50 units at the price of Rs. 100 per unit for a total investment of Rs. 5,000. If the price appreciates after 6 weeks to Rs. 110, this means that the market value of your total investment has increased from Rs. 5,000 to Rs. 5,500.