NAV is the price you pay to purchase one unit of a mutual fund. Yet it is not correct to consider NAV of a mutual fund as we do for the price of stocks. As mutual funds buy and sell equities as per their objectives, it is not correct to treat mutual funds as stocks.

The example below will give a better understanding as to why the NAV really doesn't matter while investing in mutual funds.

Let us say we are investing in two different funds namely scheme X and scheme Y that has NAV of Rs. 10 per unit and Rs. 15 per unit. So investing Rs. 15,000 in each scheme you will get 1,500 units of scheme X and 1,000 units of scheme Y respectively. Assuming that the NAV has gone up by 10 percent i.e. Rs. 11 per unit for scheme X and Rs. 16.50 per unit of scheme Y.

The value of your investment in both the schemes will be Rs. 16, 500/-

Scheme X would be Rs. 16, 500 (1,500 units x 11 NAV) and for scheme Y it would be Rs. 16,500 (1,000 units x 16.50 NAV).