Skip to main content

Understanding NAVPU Better

As an investor, I tend to be rather impulsive. So, I decided to do more studying about the NAVPU. NAVPU means Net Asset Value Per Unit. So, how do we get the NAVPU? My first understanding of NAVPU is the amount per unit to make up one unit. For example, if the NAVPU is at least PHP 100.00 per unit then spending PHP 1,000.00 will give me 10 units of that certain Unit Investment Trust Fund (UITF). However, how do we fully understand the NAVPU?

As a Metrobank client, I decided to look into Metrobank to further understand what NAVPU means than just the amount of units I can get depending on the price per unit. Here's what Metrobank says about how to understand NAVPU when investing:

Understanding the Net Asset Value per Unit

Net Asset Value per Unit, or NAVPU, on the other hand, is the underlying value of each unit. NAVPU is important because it allows you to compare how different schemes are trading, even though they may have very different prices. A large difference between price and NAVPU suggests that the market believes that either some better pricing is available, or that the NAV is overstated.

Investing in a Unit Investment Trust Fund (UITF) means you are buying units of participation. The amount of units you get depends on how much money you invest. How much each unit is worth will depend on the Net Asset Value Per Unit (NAVPU) which is the current market value of each unit of participation in the fund.

NAVPU Computation Method

NAVPU (net asset value per unit) is the total market value of the investment fund minus expenses and liabilities, divided by total number of units of participation.

How to understand and interpret NAVPU

To determine the value of your UITF investment, simply multiply the net asset value per unit (NAVPU) by the number of units of participation acquired. The value of the NAVPU changes daily depending on current market conditions

NAVPU will be different for various funds because the value of their investments will be different.
These expenses will include management fees. As the Bank of the Philippine Islands would like to illustrate the formula as follows with these images owned by them:

BPI

Trying to take a look at the value of all securities (Total Asset Value) less the expenses which include the management fees, taxes, and every other expenses. In short, it's very similar to a stock market where there are buying fees and selling fees. The NAVPU would mean that there's some deduction done in the process such as the annual management fee. If my AXA Chinese Tycoon Fund management fee is 2.5% per year then I'm charged 0.2083% per month whenever I pay the PHP 3,000.02 monthly charge. That means I'm paying PHP 6.25 per month for every time I pay the monthly fees. Meanwhile, if I get the Philippine Stock Equity Index Fund's 1.5% management fee then I'm paying PHP 1.25 as a management fee per PHP 1,000.00. This of course is not yet the NAVPU since the taxes and other expenses aren't accounted for yet. NAVPU would mean all expenses have been paid for. 

In accounting, your net profits are profits that are done after paying all expenses. A company pays its managers (management fees), workers (otherwise said workers have every right and duty to quit a company that doesn't pay them properly), and other expenses (such as electricity, water, and phone bills) then there are still taxes. Deduct all revenues minus all expenses and that becomes the net profit after taxes. The net profit after taxes goes to the capital which must subject itself (again) to be used for future expenses. The capital provides the equipment, materials, salary for all kinds of workers (hence they become partakers of the fruit of the labor), and the money for all accounts payable. 

So, the NAVPU is basically the profit per unit when the management fees, taxes, and every other expenses (such as buy and sell fees) are accounted for. So, the best way to buy in bulk is to wait for the NAVPU to be in dip. Meanwhile, the NAVPU may not always be at a dip so setting a minimum amount (such as PHP 1,000.00 to PHP 2,000.00 for beginners) per month would be beneficial. I would invest every month even when the market is high (buy high, sell higher) and then buy more than usual when the market is low (buy low, sell higher). A combination of both for a certain span (I intend to use the money later) would probably give me the best yields overall. So, during the span of five years ore more--my focus is to invest more during a bear more or invest less during a bull market. 

References

Websites

"Investment Academy: NAVPU and NAVPS" 

"Net Asset Value per Unit (NAVPU)"
Labels:

Popular posts from this blog

Venezuela as a Cautionary Tale on #SahodItaasPresyoIbaba, Nationalistic Pride, Welfare State Economics

The Sunday Guardian Years ago, I wrote about Venezuela's pride and protectionism , under a more "formal" style of writing compared to my latest posts. I decided to use an even "less formal" and "less academic" tone since I'm not writing a term paper. Instead, it's like how a professor and a student discuss the thesis using first person over third person, using contractions, etc., while the thesis doesn't use such tones. Back on track, I thought about the arrest of Venezuelan President Maduro can spark debate. Was it a violation of sovereignty? I'm no expert on international law. However, Venezuelans can be seen celebrating Maduro's arrest. Right now, I'm using Gemini AI and Google search to help me find some sources for this blog. It's because I don't want my blog to become another gossip central, but a place to discuss facts with my own personal opinions (making sure they don't  derail the facts).  I used Venezuela ...
Read more

Davide vs. Mahathir: Which Lolo Should Filipinos Take Economic Advice From?

The real issue isn't that something is old or new. Instead, if something old or new still works, or doesn't work! Many modern laws are built on some ancient principles, while adjusting to the current times!  The Constitution of Japan is actually older than the 1987 Constitution of the Philippines. However, it's more effective for the reasons that (1) their constitution is silent when it comes to regulating economic activities (ex., protectionist measures), and (2) it's a parliamentary system. Honestly, it's a pretty straightforward constitution compared to ours! As Mahatir Mohamad turned 100 today, I would like to raise up Atty. Hilario G. Davide Jr. once again. The problem isn't Davide's age but his unwillingness to embrace change when needed (read here ). This time, it's time to bring up a contrast between wise old people and unwise old people. A young person can be right where the old person is wrong. A young person can be wiser because he or she lea...
Read more

How Many MORE Unmitigated Typhoon Disasters Before Filipinos Realize That the Filipino First Policy is FAILING Them?!

GMA Network I remember surviving through Typhoon Odette last 2022. Tino happened on November 6, 2025, which also reminds me that Yolanda's anniversary came two days later . Yolanda was even worse than Odette! Thankfully, Cebu City's impact wasn't as bad, and power didn't take too long to return, unlike Yolanda. However, seeing news reports such as an investigation done against Slater Young's project in Monterazzas de Cebu should highlight a bigger problem. Looking at the photos of floods on Facebook makes me think, "How many more unmitigated typhoon disasters until Filipinos realize that the Filipino First Policy is failing them and that the 1987 Constitution of the Philippines  badly needs updates?"  For die-hard defenders like Atty. Hilario G. Davide Jr. (who will turn 90 this December 20) or Atty. Christian Monsod (who's 89 this year), they're prone to saying that it's just a matter of implementation . However, whether we want to admit it...
Read more

When a Merry Christmas Leads to an Unhappy New Year Due to FINANCIAL DEBT

WWD Christmas is near and I could rant about everything I hate about the season. I could think of heavy traffic and overcrowded malls. It's understandable if there are office Christmas parties. The bigger problem lies with people who end up wasting their paychecks all year round (read here ). It's just a few days before Christmas and I can see the excitement. For some, they're all waiting for the gifts people have to give them and what to give to people. In the Philippines, it tends to focus on partying which is somewhat similar to the American view of Christmas.  I could remember living downtown in Cebu City for a good portion of my life. Some neighbors would party until dusk. I could remember huge crowds with their chatter together with loud music. Some people even hire a band to add to the merriment. Granted that some people have very little financial discipline . I'm not surprised that they would celebrate for the sake of celebrating. The mentality that they have lo...
Read more

Buying Lottery Tickets ISN'T Investing

It's fascinating (and annoying) that people want to get rich quick. The bad news is it's easy come and easy go. People do all sorts of crazy stuff trying to get rich quick. Back in 2022 while repairs after the Odette disaster were done, I wrote an article about not investing while having a gambling addiction . Some people may have pulled their money out of the index funds and played Axie Infinity trying to make a quick buck. Some people got into cryptocurrency with the same hopes of getting rich quick fast. Before cryptocurrencies and  Axie Infinity , the lottery ticket was treated like a "golden ticket". When I mention "golden ticket", some people may have seen the classic Willie Wonka movie where each child had a golden ticket. Only one of the children could inherit the main character's candy factory.  It makes me laugh (and cringe) that people waste their money on a lottery ticket. A wife can complain about her husband buying lottery tickets instead o...
Read more