Is there any limit where NAV will saturate for a particular mutual fund?

After investing in a mutual fund, we make profit as NAV of the fund increases . My question is how can NAV keep increasing day by day? Somewhere it must saturate and become a constant more or less. (This is because I think, there is a limit to growth in every aspect of economy..things can not move to infinite values) After that what happens? Does investment in mutual fund remain profitable? Or is there something wrong with my argument?
Yes I understand that mutual funds also give dividends and that is one way of making profit. But just after declaring dividend, the NAV also drops proportionally. What about that?

6 Replies to “Is there any limit where NAV will saturate for a particular mutual fund?”

  1. Funds are always selling stocks and buying new ones and the companies a fund owns usually keep earning money and increasing their value. Plus reinvesting dividends and capital gains increases the number of shares an investor owns. And with periodic investment, dollar cost averaging buying more shares when prices are low and less when prices are high the value of their investment keeps growing over time.

  2. you are wrong my dear… It can go up to any numbers if the sensex go up to 45000 your fund NAV wll also will go up sharply….anything is possible in the market

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  3. There is as such no saturation in NAV of Mutual Funds. NAVs of Mutual Fund they keep on varing depending upon, performance of Funds, if Fund is doing good and company is making profit, your NAV will increase or vise versa.

  4. nav value increases/decreases as per their investment and expenditures done by them according to their policy and plan.
    dividend paid will certainly decrease their nav.
    investment in mutual fund remain profitable if they earn in net or it may decrease is the matter of their future prospectus.

  5. NAV is based on the value of the portfolio. and the no of units issued. Since mutual fund managers keep changing the portfolio , if the stocks they choose go up , your NAV keeps going up . There is no limit.

    Reliance Growth Fund was started in October 1995. NAV 10

    Today for growth option the NAV has crossed 500

    Having said this , while investing in a fund , the present NAV does not matter. NAV matters only at the time of redemption. It is safer to invest in an existing fund with a good history of past performance , ( whatever may be the NAV ) than investing in a fund with NAV 10. Your returns are based only on the performance of the fund after you enter and does not depend upon the present NAV. . NAV is not like share price. Most investors treat it this way and that is why they subscribe to NFOs. AVOID NFOs.

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