14. Units, NAV and dividends
Units. Units equal the amount you pay divided by the price per unit that day. The price is ₦1,000 until the first valuation. After that it is the latest approved NAV per unit. Units are rounded down to four decimal places.
Example: Musa pays ₦500,000 at ₦1,000 per unit and gets 500 units. Later he pays ₦100,000 when NAV is ₦1,020, and gets 98.0392 units.
NAV. The fund manager values the fund. The net assets (assets minus liabilities) are divided by the total units. A finance approver checks and approves each NAV. When a new one is approved, you are told.
Example: assets ₦618,000, liabilities ₦6,000, 600 units. ₦612,000 ÷ 600 = ₦1,020 per unit.
Your membership card shows:
- Units held, and Value at NAV
- NAV per unit, with its valuation date
- Contributed
- Redemptions, with each request and its status
- Dividends, with the gross, tax and net amounts
- Unit register, the last 20 movements
Dividends. Dividends are paid once a year to the units you held on the record date. Tax at 5% comes off the gross amount.
| Musa, 600 units, ₦20 per unit | Amount |
|---|---|
| 600 × ₦20 | ₦12,000 gross |
| Withholding tax at 5% | minus ₦600 |
| Paid to Musa | ₦11,400 net |
Common problems.
- Your value looks wrong. It uses the latest approved NAV. A new valuation may still be waiting.
- You are not in a dividend. You must hold units on the record date.
- A dividend is not marked paid. The custodian must confirm payment and an approver must approve it.