Mutual funds collect money from retail investors (you) and invest them in various investment vehicles like stocks, bonds, etc. Mutual funds may not necessarily invest all the money that they have with them. Also, since they invest in stocks, the value of these stocks changes with time. Mutual funds are divided into units. When you invest in a mutual fund, you are given units of the mutual funds. The NAV is a representative of all the assets held by a mutual fund.

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