I noticed that when my Mutual Fund is performing negatively, not only my NAV (Net Asset Value) decreases (which is understandable), but also my total number of units (that I bought) goes down. However, when the Mutual Fund is performing positive, my NAV increases, but the total number of units remains the same. Why so?

  • 1
    The only way the number of units goes down is if you sell some. Have you had any distributions or rebalances that would have changed the number of units you own? Does your transaction history indicate anything?
    – D Stanley
    Apr 3, 2018 at 12:34
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    By any chance is this a managed account and some shares were sold off to pay for the fee? Apr 3, 2018 at 15:11

1 Answer 1


Depending on the fund you have subscribed to, there are some maintenance fees deducted by the broker, and for this purpose, some units are sold.

Edit: Clarifying the various comments, I guess everyone is on same page and saying the same thing a bit differently. The funds could be managed by a broker and there is a charge separate to the fund house. This is more often seen in ULIPS, Retirement Funds etc.

  • Roll back if my edit wasn't welcome. Apr 3, 2018 at 13:48
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    @JoeTaxpayer It is a maintenance fee charged by fund house. Rather than asking for cash from subscriber, the eq units are sold.
    – Dheer
    Apr 3, 2018 at 15:41
  • @Dheer how can you be certain that this is the reason for the drop? There are a number of transactions that could change the number of units owned.
    – D Stanley
    Apr 3, 2018 at 15:43
  • This must be something specific to India, or possibly to mutual funds organized outside the US. A US mutual fund does not sell shares of the fund that a shareholder owns in order to get its maintenance fees. It may sell some securities that the fund holds and collect its fees from the proceeds, but that merely reduces the NAV of the fund shares, not the number of fund shares that the shareholder owns. Now, if the mutual fund is held through a brokerage house, the brokerage might sell some of the mutual fund share owned by the account holder to collect its maintenance fee..... Apr 3, 2018 at 19:37
  • @DilipSarwate The OP hasn't stated whether their fund is held in an account with the fund administrator, or held in some other type of brokerage account not associated with the fund administrator. The first case seems to match your description - it's just part of the internal expense ratio of the fund. In the second case, the fund itself is the security, from the point of view of the brokerage, so, if the account holder owes fees, the brokerage's terms of service probably include provisions for the brokerage to liquidate something in the account in order to collect the fees.
    – Beanluc
    Apr 3, 2018 at 23:19

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