NAV, or Net Asset Value, is simply the price of one unit of a mutual fund on a given day. Think of a mutual fund as a big basket of stocks or bonds owned jointly by thousands of investors. The fund adds up the total value of everything in that basket, subtracts any expenses owed, and divides by the number of units investors collectively hold. Whatever number comes out is the NAV — the price you pay to buy one unit, or receive when you sell one.
NAV changes every business day because the value of the underlying stocks or bonds keeps moving with the market. A rising NAV usually means the fund's investments have grown in value, while a falling NAV means they have dropped. It's worth knowing that a low NAV does not mean a fund is ‘cheap’ or a better deal — what matters is how much the NAV grows over time, not its starting number.