Glossary - Net Asset Value (NAV)
Net Asset Value (NAV) is the total value of a fund's assets minus its liabilities. It is often used in the context of mutual funds, hedge funds, and exchange-traded funds (ETFs) to provide a per-share value of the fund, allowing investors to understand the value of their investment holdings at a glance. NAV is calculated by dividing the difference between assets and liabilities by the number of outstanding shares.
Also known as
- Net Asset Value Per Share
Use cases examples
- Mutual Fund Daily Report: The NAV of the XYZ Growth Fund stands at $15.24 per share as of the close of markets on [date], according to the daily mutual fund report provided by the fund manager.
- ETF Prospectus: As detailed in the ETF prospectus, the Net Asset Value (NAV) will be calculated daily after the close of exchanges and will reflect the total value of the ETF's assets minus its liabilities, divided by the number of shares outstanding.
Considerations for investors
- Investors should regularly monitor the NAV of funds they are invested in to assess performance and make informed decisions about buying or selling shares.
- It is important for investors to understand that NAV does not include load fees or brokerage commissions that may apply to mutual fund transactions.
Considerations for founders
- Founders should understand how NAV is used by investors to assess the value of investments in funds, as it can influence investment decisions into their companies.
- Being knowledgeable about NAV can help founders better communicate their company’s value and performance to potential investors who use this metric.
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