Easy Way To Calculate Mutual Fund’s Capital Gain

Hi, Moduers!

When we invest in a mutual fund, of course, we expect it to generate a capital gain. But, how do we know whether it generates a return or not?

This article will discuss how to calculate a mutual fund’s capital gain or loss easily per the title. So, you can still bear with us, even if you are a newbie.

When investing in a mutual fund, you will buy something called participation units. Participation units are units of mutual fund ownership that you buy on the net price called NAV (Net Asset Value). NAV means mutual fund’s net price since NAV is the mutual fund’s price after deducting its operational costs such as administration fees, custodian bank fees, et cetera.

Net Asset Value (NAV)

A custodian bank calculates Net Asset Value at the end of every bourse day. If you buy or subscribe to the mutual fund before the cut-off time (at 1 pm Jakarta time), your transaction will be processed using the NAV of that bourse day. For instance, you subscribe to BNP Paribas Rupiah Plus worth IDR 200,000 while its NAV is IDR 2,000 per unit before 13.00 WIB, then you will get 100 units of participation.

When you invest in mutual funds, you will profit when you sell your participation units at a higher NAV. Like in the example above, you get 100 participation units when its NAV (price) is IDR 2,000 per unit. And then, after a while, you redeem (sell) all of your participation units when the NAV is IDR 2,100 per unit. From the redemption, you will get IDR 210,000, or it means you generate 5% from the investment.

Another way to know the gain or loss of your investment is to check your investment portfolio in the potential gain or loss section like this. This potential gain or loss is only realized when you redeem your investment. So, when you see a possible loss on your investment, you don’t need to be panic Moduers, since it’s still a paper loss.

Now, you understand how to consider your investment as capital gain or loss, right? Hopefully, it gains your passion for investing, too, Moduers!

Salam Moduit!


*) Disclaimer: Pictures and explanations relating to mutual fund products are only for illustration purposes, not investment recommendations.