How was the NAV for SBI Magnum Gilt Fund Direct Growth arrived at?

The Net Asset Value is the per share market value of a mutual fund scheme. It is obtained by dividing the difference between the firm's total assets and liabilities by the number of outstanding units in the fund.

SBI Magnum Gilt Fund Direct Growth NAV calculation:

NAV: (Assets - Liabilities)/ Total Number of Outstanding Units

SBI Magnum Gilt Fund Direct Growth NAV History

SBI Magnum Gilt Fund Direct Growth NAV Monthly History

Month
Open(₹)
Close(₹)
January
54.14
53.93
February
53.93
54.2
March
54.2
54.4
April
54.4
54.29
May
54.29
54.03
June
54.03
54.52
July
54.52
54.74
August
54.74
55.26
September
55.26
55.52
October
55.52
-
Month
Open(₹)
Close(₹)
January
52.32
51.95
February
51.95
51.81
March
51.81
52.25
April
52.25
52.63
May
52.63
52.81
June
52.81
52.94
July
52.94
53.07
August
53.07
53.52
September
53.52
53.82
October
53.82
53.72
November
53.72
54.02
December
54.02
54.14
Month
Open(₹)
Close(₹)
January
46.73
46.79
February
46.79
47.93
March
47.93
48.49
April
48.49
49.32
May
49.32
50.36
June
50.36
50.76
July
50.76
51.13
August
51.13
51.1
September
51.1
50.82
October
50.82
51.79
November
51.79
52.08
December
52.08
52.32
Month
Open(₹)
Close(₹)
January
40.95
40.89
February
40.89
41.19
March
41.19
41.81
April
41.81
41.91
May
41.91
43.14
June
43.14
44.29
July
44.29
45.61
August
45.61
45.77
September
45.77
45.75
October
45.75
46
November
46
46.27
December
46.27
46.73
Month
Open(₹)
Close(₹)
January
38.79
38.13
February
38.13
38.14
March
38.14
38.95
April
38.95
38.72
May
38.72
38.78
June
38.78
38.87
July
38.87
39.38
August
39.38
39.23
September
39.23
39.38
October
39.38
39.81
November
39.81
40.35
December
40.35
40.95
Month
Open(₹)
Close(₹)
January
37.15
37.53
February
37.53
36.8
March
36.8
37.51
April
37.51
37.53
May
37.53
38.34
June
38.34
39.04
July
39.04
39.29
August
39.29
39.44
September
39.44
39.27
October
39.27
39.14
November
39.14
39.12
December
39.12
38.79
Month
Open(₹)
Close(₹)
January
31.8
31.9
February
31.9
31.98
March
31.98
32.51
April
32.51
32.84
May
32.84
32.97
June
32.97
33.39
July
33.39
34.6
August
34.6
34.98
September
34.98
35.54
October
35.54
35.78
November
35.78
37.84
December
37.84
37.15
Month
Open(₹)
Close(₹)
January
29.41
30.37
February
30.37
30.55
March
30.55
30.54
April
30.54
30.48
May
30.48
30.61
June
30.61
30.38
July
30.38
30.76
August
30.76
31.14
September
31.14
31.81
October
31.81
31.85
November
31.85
31.76
December
31.76
31.8
Month
Open(₹)
Close(₹)
January
24.48
24.75
February
24.75
24.76
March
24.76
25.12
April
25.12
25.37
May
25.37
25.91
June
25.91
26.22
July
26.22
26.49
August
26.49
26.67
September
26.67
27
October
27
27.87
November
27.87
28.66
December
28.66
29.41
Month
Open(₹)
Close(₹)
January
23.11
23.41
February
23.41
23.63
March
23.63
23.77
April
23.77
24.27
May
24.27
25.26
June
25.26
25.13
July
25.13
24.61
August
24.61
23.96
September
23.96
24.16
October
24.16
24.61
November
24.61
24.4
December
24.4
24.48

What does SBI Magnum Gilt Fund Direct Growth’s NAV mean to investors?

It is a common misnomer that a low NAV implies a better investment. In fact, you would have come across several mutual fund schemes that promote their funds with a low NAV as “cheaper” compared to others. The NAV of a mutual fund is unlike the share price of a stock where stocks with lower values and high growth potential are considered lucrative. When we talk of NAV, it is essentially just the current book value of all the assets minus the liabilities of a particular scheme. The following example can help make things clearer:

Let’s say we have two funds namely, Fund A and Fund B.

The NAV of Fund A is Rs 10 and the NAV of Fund B is Rs 100.

Now, say you have Rs 10,000 to invest in the funds. 

ParticularsFund AFund B
NAVRs 10Rs 100
Units bought (with Rs 10K investment)1000 units100 units
NAV (increases by 50%)Rs 15Rs 150
RetursRs 15,000Rs 15,000


As you can observe from the above table, the returns (Rs 15,000) remain the same irrespective of the NAVs of the funds. Hence, the common notion that funds with higher NAVs give higher returns stands null and false as proved by the above example. Your main focus must be the total returns generated by the fund while making an investment decision. The total return (CAGR) for SBI Magnum Gilt Fund Direct Growth as on 05.10.2022 is 9.4.

Check SBI Magnum Gilt Fund Direct Growth to get a detailed description of the total returns.

An Important Point to Remember

In case, any company in your mutual fund portfolio distributes dividends. It is of the mutual fund’s discretion to distribute at a particular interval. But when they do, the NAV of your fund shall decrease reflecting a decline in the total corpus of the fund. On the other hand, there are funds that do not give dividends to shareholders but reinvest them in order to buy more units. As a result the total number of outstanding units of the fund increase which shall in turn decrease the NAV of the fund.


In the case of mutual funds of the growth plan category, no dividend is paid to investors. The entire dividend amount is reinvested by the fund in buying more assets to increase the long-term gains of the fund. In this case, the NAV does not decrease.

Factors affecting the NAV of a mutual fund

Profits/ Losses from the underlying assets: The NAV of a mutual fund simply reflects the profits and losses of the underlying assets that the mutual fund has invested in. When the assets increase in their value, the NAV increases and vice versa.


Expenses regarding the management of funds: Mutual funds as you would be aware are managed by professional managers who actively invest in various assets to generate good returns. The managers charge a certain fee for doing the same. These fees are reduced from the total NAV of the fund.


The number of investors who buy and sell units: If a large number of investors book their profits by selling units of the fund at higher NAVs, the NAV shall decrease (similar to profit booking seen in stocks). On the other hand, if investors buy mutual fund units at lower NAVs, due to the rise in the number of units, the NAV drops.


Type of mutual fund: Generally, a regular mutual fund has a higher NAV compared to a direct fund. A regular fund includes broker and intermediary fees whereas a direct fund has none.


Dividend Payouts: As we had explained above, when mutual funds pay dividends, it reduces the NAV as it is akin to withdrawing money from your own investment.

FAQs

The Net Asset Value of a fund is arrived at by dividing the difference between the fund’s total assets and liabilities by the total number of outstanding units of the fund. (Assets-Liabilities)/Total Outstanding Units of the fund.

Investors must be concerned largely about the returns of a mutual fund more than the NAV. It is advised not to base any investment decision purely on the basis of the NAVs of a mutual fund as they do not suggest the future prospects of the fund. While funds with higher NAVs do suggest that the fund has been in existence for a long period of time.

As explained in the paragraph above, the NAV of a fund is simply the value of each unit of a mutual fund got by dividing the difference of total assets and liabilities of a fund by the outstanding shares. A fund with a low NAV does not mean that the fund is available at a cheaper value or vice versa. It simply means that you can purchase extra units of a fund with a lower NAV and fewer units of the same in the case of a fund with a higher NAV.

Mutual Fund Companies update the value of their funds’ NAVs on a daily basis. As per SEBI guidelines, companies have to update their NAVs by 9 PM daily.

There are various factors that affect the NAV of a fund:

  1. Profits/ Losses from the underlying assets
  2. Expenses regarding the management of funds
  3. The number of investors who buy and sell units
  4. The type of mutual fund
  5. Dividend Payouts

We have explained each of these points in the paragraph above.