The most optimal approach is not to track NAVs daily, NAVs will account for the overall move in the market since Friday.
At the end of the day the Net Asset Value (NAV) of a mutual fund will be declared daily. It is the value of a mutual fund, which is based on its portfolio value. The NAV reflects movements within the underlying portfolio and thus, for example, equity fund NAVs move broadly in sync with market indices like the Nifty or Sensex.
When markets are up 1%, equity mutual funds will be up by around this amount, on average. Funds will be up by larger or smaller percentages due to portfolio outperformance or underperformance and portfolio beta (a measure of portfolio responsiveness to the index). However this may not have been the case on Monday.
On 1 February, which was a saturday, the Union Budget was presented. Markets were open that day but there was no mutual fund buying and selling. The Association of Mutual Funds of India (AMFI) issued a notice stating that the mutual funds would not be a business day. As a result, NAVs reflecting the drop in Saturday's markets were not put out by mutual funds.
The Nifty closed down 0.4 percent on Monday but this was not big enough to compensate for Saturday's sharp fall. Consequently, NAVs from mutual funds are likely to show negative returns despite Monday's positive market close. This is because they will be negative in account of the aggregate market move since Friday, which is on balance.
Investors should note that the most optimal approach is not to track NAVs daily. Investing long term entails a multi-year horizon over which everyday movements are ironed out. However, this is the explanation if you're puzzled by the move in your fund NAVs compared to the market.
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