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Mutual Fund NAVPS: Compute Your Mutual Fund Earnings in 3 Simple Steps

Is your mutual fund investment earning money for you?

After reading about the benefits of investing in mutual funds in the Philippines, most of you have taken to emailing me their questions about how to earn in their investments.

Here’s a short (edited) email sent to me by one of The Wise Living’s readers:
Hi! Lianne,

I would like to ask questions regarding Mutual Funds.What is NAVPS? I’ve read that you can sell your share and redeem it. Please correct me if I’m wrong. Thanks!
Most of you guys have sent variations of that email, so we’ve decided to make a general post about it. Let’s get this mutual fund party started!

Mutual Fund NAVPS: Compute Your Mutual Fund
Yay, math that isn’t complicated!

1. Get the total number of shares that you own in your mutual fund investment.

When you invest in mutual funds (or when you get a VUL), you buy shares of the mutual fund company, right?

The price per share is called the Net Asset Value Per Share (NAVPS). This price changes daily and it depends on the investment type that you have.

We’ll do a real-life scenario, based on actual figures, okay?

For example, last June 26, 2006, you invested P20,000 in Sun Life Balanced Fund which has P1.5542 as its NAVPS for that day.

Number of shares = Investment Capital / NAVPS
Number of shares = P20,000 / P1.5542
Number of shares = 12,868.36
Since there are no half shares, we’ll get the whole number.
Number of shares = *12,868

* Assuming that this is already net of fees.

You got 12,868 shares when you originally invested. Assuming that you didn’t add any subsequent investments, 12,868 is the total number of shares that you own. Of course, this will increase if you added more investments. 🙂

2. Get the current NAVPS value of the mutual fund you invested in.

Before investing, you told yourself that you plan to redeem your investment after 8 years.

It’s now April 15, 2014, tax season. 8 years already passed.

After giving your hard-earned money to BIR (and not getting any transparency in the tax allocation scheme), you remember your investment, so you want to redeem your investment now. It’s been 8 years, after all!

Right now, the NAVPS is P3.5342. Where did we get this amount? It’s displayed on Sun Life’s website. Yes, you can just see the NAVPS there. Convenient, right?

3. Get the profit of your mutual fund investment.

Take note that you can only get profit once you actually redeem your investment. Otherwise, it’s just “paper income.”

Profit = (Current NAVPS – Original NAVPS) x total number of shares that you own
Profit = (P3.5342 – P1.5542) x 12,868
Profit = P25,478.64

Another way you can compute this is:

Profit = Current investment value – Beginning investment value

Beginning investment value = 12,868 shares x P1.5542
Beginning investment value = P19,999.4456

Current investment value = 12,868 shares x P3.5342
Current investment value = P45,478.0856

Profit = Current investment value – Beginning investment value
Profit = P45,478.0856P19,999.4456
Profit = P25,478.64

It’s as easy as 1-2-3, right?

See, investment doesn’t need to be such a pain in the head. It doesn’t have to be complicated and it doesn’t need to make your nose bleed!

For any comments/questions, feel free to comment.


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Want to get started managing your money/budgeting/investing? Contact me, your trusted financial advisor, through the following:

Twitter: @MsLianneLaroya
Mobile: 0916 737 8741

And we can even meet personally for a FREE financial planning session! Let me know so we can finalize a schedule that works.

If you find this post helpful, please SHARE it to your friends. Who knows, you might help them by educating them. 🙂 Thank you, wonderful people!

Live wisely,

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