NAV computation methodology for Indian mutual funds

Sat, 16 May 2026 00:00:00 +0000

The NAV computation methodology for Indian mutual funds is the standardised daily process by which the per-unit value of each scheme is calculated, comprising the market valuation of every security in the portfolio, the accrual of income and expenses, the application of plan- and option-specific adjustments, and the division of net assets by units outstanding. The methodology is prescribed by SEBI through Regulation 47 and the Eighth Schedule of the SEBI (Mutual Funds) Regulations, 1996 , implemented by valuation policies maintained by each AMC and operationalised by the fund accountant , with daily price inputs from two SEBI-recognised valuation agencies (CRISIL Ltd and ICRA Analytics).

Mark-to-market (MTM) for debt holdings in mutual funds

Tue, 12 May 2026 00:00:00 +0000

Mark-to-market (MTM) valuation of debt holdings is the practice of valuing a mutual fund’s fixed-income portfolio at current market prices (based on current market yields) rather than at the original purchase price or on an amortised cost basis. Under full MTM, the NAV of a debt mutual fund rises when market interest rates fall (because bond prices rise when yields fall) and falls when market interest rates rise (because bond prices fall when yields rise). This price sensitivity to interest rate movements is the primary source of NAV volatility in debt funds.

Mark-to-Market on WebNotes

NAV computation methodology for Indian mutual funds

Mark-to-market (MTM) for debt holdings in mutual funds