Money word, in plain English ← Back to all terms
Unit
One share of a mutual fund. You buy units, and their price is the NAV.
Example. Invest ₹2,000 at a NAV of ₹40 and you receive 50 units.
When you invest in a mutual fund you do not buy the fund itself, you buy units of it. The number you get is your money divided by that day NAV, and you can hold fractions of a unit, so nothing is rounded away. Your holding is simply units multiplied by the current NAV. This is why a low NAV does not mean a cheap fund. You just get more units, each worth less.
One money lesson, in your inbox
A short, plain money lesson built from real news. Free. Unsubscribe anytime.
We will never spam you or sell your details.