Methodology of Calculation of Sale and Repurchase Price of Mutual Fund Unit

Published On: 25-Jul-2018

Numerical examples explaining the methodology of calculating the subscription price of units:

1. Sale Price - Ongoing price

Ongoing price for subscription (purchase)/switch-in (from other Schemes/plans of the mutual fund) by investors.

Purchase Price = Applicable NAV (for respective plan and option of the scheme)

Example: An investor invests Rs. 10,000/- and the current NAV is Rs. 10/- then the purchase price will be Rs. 10/- and the investor receives 10,000/10 = 1000 units.

2. Redemption Price

Redemption Price for each Option will be calculated on the basis of Applicable NAV and Exit load, if any. The Redemption Price per Unit will be calculated using the following formula:

Redemption Price = Applicable NAV * (1 - Exit Load, as applicable)

Applicable exit load shall be subject to the tenure of investment of the investor in the scheme vis-à-vis the exit load structure applicable when investor had invested in the scheme.

Example: If the Applicable NAV is Rs. 10 and a 2% Exit Load is charged, the Redemption Price per Unit will be calculated as follows:

            = Rs. 10 * (1-0.02)

            = Rs. 10 * (0.98)

            = Rs. 9.80