NAV Calculation Rules

EXPLANATION

For cheque purchases, the applicable NAV depends on when the cheque is realised (cleared) in the AMC's account — not when it is submitted. For purchases below ₹2 lakh, submission date NAV applies if submitted before cut-off. For ₹2 lakh and above, the NAV date is when funds are actually realised. This prevents investors from benefiting from market movements during the cheque clearing period.

EXPLANATION

Amortisation values a debt instrument by accreting the discount (or amortising the premium) between purchase price and face value in a straight line over its remaining life. For money market instruments maturing within 30-60 days, SEBI permits amortisation instead of full MTM valuation, producing smoother NAV movement since these short-dated instruments have minimal price volatility.

EXPLANATION

Many schemes have a minimum balance requirement (e.g., minimum 100 units or ₹1,000). If a partial redemption would reduce the folio balance below this minimum, the AMC may automatically redeem the entire remaining balance and close the folio. This prevents very small dormant balances that create administrative costs for the AMC and confusion for investors.