NAV is Net Asset Value. It is the basic metric to measure the value and performance of a mutual fund. When you purchase a stock in the share market, you buy it at the prevailing market price. When you buy a mutual fund, you buy it at the fund’s NAV for the day. 

NAV value moves according to the price of stocks in its portfolio. 

The formula for calculating NAV is: (Total Assets - Total Liabilities)/Total number of units

Fund managers invest the assets in the stock market. The NAV goes up or down depending on the value of shares going up or down everyday in the market. NAV is not an absolute value that can be compared across different schemes. It is a relative index to compare a particular scheme’s performance over a period. NAV is published on a daily basis.