Net Asset Value (NAV) is a financial metric commonly used to assess the value of an investment fund, such as a mutual fund, exchange-traded fund (ETF), or closed-end fund. It represents the per-share value of the fund’s assets after accounting for liabilities.
NAV is calculated as:NAV=(Total Assets - Total Liabilities)Number of Outstanding Shares\text{NAV} = \frac{\text{(Total Assets - Total Liabilities)}}{\text{Number of Outstanding Shares}}NAV=Number of Outstanding Shares(Total Assets - Total Liabilities)
Key Points:
- Total Assets: The total market value of all the securities and other holdings the fund owns.
- Total Liabilities: All the fund’s financial obligations, including management fees, operating expenses, and any other debts.
- Outstanding Shares: The total number of shares held by investors in the fund.
NAV is typically calculated at the end of each trading day for open-end funds like mutual funds, as it provides investors with the price per share for transactions on the next trading day. For ETFs, NAV is calculated continuously throughout the trading day.