Net Asset Value per Unit (NAVPU) Computation and Valuation
What this domain tests
This domain tests the NAVPU formula, fair valuation, accrual of income and expenses, unit creation and redemption, and forward pricing. Expect computational items and questions on rounding and cut-off timing.
Core rules and concepts
- NAVPU = (total fund assets at fair value minus total liabilities) / total units outstanding.
- Assets are marked to market using approved valuation sources. Liabilities include accrued trustee and custodian fees, payables, and other obligations.
- Income accrues to the fund, and expenses reduce it. Valuation must be consistent, documented, and independently reviewed.
- Subscriptions and redemptions use the next computed NAVPU after the dealing cut-off, not a stale or historical NAVPU.
- Units issued equal subscription amount divided by NAVPU. Units redeemed equal redemption amount divided by NAVPU. Rounding conventions must follow plan rules.
Worked example
Fund assets are PHP 100,000,000 and liabilities are PHP 250,000. Units outstanding are 20,000,000. NAV = 100,000,000 - 250,000 = PHP 99,750,000. NAVPU = 99,750,000 / 20,000,000 = PHP 4.9875. A new subscription of PHP 1,000,000 creates 1,000,000 / 4.9875 = 200,501.2531 units, rounded per plan rules. If accrued income of PHP 50,000 is added with no other change, NAVPU rises to 99,800,000 / 20,000,000 = PHP 4.9900.
Traps that cost marks
Dividing by an old NAVPU; deducting a sales charge from NAV instead of handling it per plan rules; ignoring accrued expenses; failing to update units outstanding after creation or redemption; mixing subscription cash with fund assets before valuation; rounding units incorrectly.