Net Asset Value (NAV) is the price per share of a mutual fund or ETF, calculated by subtracting liabilities from assets and dividing by the number of shares outstanding.
In Depth
Net Asset Value (NAV) is essentially the price of one share of a mutual fund or Exchange Traded Fund (ETF). It's calculated at the end of each trading day by taking the total value of all the fund's assets (like stocks, bonds, and cash), subtracting its liabilities (like operating expenses), and then dividing that number by the total number of outstanding shares. This figure is crucial for investors as it determines the price at which they can buy or sell fund shares.
Example
If a mutual fund has $100 million in assets, $10 million in liabilities, and 10 million shares outstanding, its Net Asset Value (NAV) would be $9.00 per share.