Definition

Net Asset Value is the per unit value of mutual fund based on the purchasing or redeeming the mutual fund by the investor. Applicable NAV is a NAV at which transaction is affected. A cut off time is decided by the fund and all redemption or investments will be executed at particular NAV.

Explanation

The NAV is relevant if the application for making investment is received before the cut off time. The time at which the redemption request is received is crucial because NAV is declared for each day after the closing of the business day.

Furthermore, applicable NAV for the purchase and redemption of the investment will be considered on the same day if the application is received on a business day before 03:00 pm. After 03:00 pm, next day NAV will be applicable.