Net Asset Value

“Net asset value,” or “NAV,” of an investment company is the company’s total assets minus its total liabilities.

For example,

NAV = Assets – Liabilities

  • Assets  = $100
  • Liabilities = $10
  • NAV = $90

To calculate the NAV per share simply divide the NAV by the huber of shares that are outstanding.

  • Mutual funds and Unit Investment Trusts (UITs) generally must calculate their NAV at least once every business day, typically after the major U.S. exchanges close.
  • A closed-end fund, whose shares generally are not “redeemable”—that is, not required to be repurchased by the fund—is not subject to this requirement.
  • That is, the price that investors pay to purchase mutual fund and most  UTI shares is the approximate per share NAV, plus any fees that the fund imposes at purchase (such as sales loads or purchase fees).
  • The price that investors receive on redemptions is the approximate per share NAV at redemption, minus any fees that the fund deducts at that time (such as deferred sales loads or redemption fees).
  • The redemption is the return of an investor’s principal in a fixed income security, such as a preferred stock or bond; or the sale of units in a mutual fund.

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