Discount To Net Asset Value

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Dictionary Says

Definition of 'Discount To Net Asset Value'

A pricing situation that occurs with a closed-end mutual fund when its market price is currently lower than the net asset value of its components. Discounts can occur in times where the market has a pessimistic future outlook and fund investors have started to sell their holdings.

Also known as "discount to NAV".
Investopedia Says

Investopedia explains 'Discount To Net Asset Value'

This phenomenon only occurs in closed-end funds. Open-end funds, on the other hand, are not as affected by supply and demand because they are bought and sold at prevailing net asset values.

While a discount NAV could be an indication that the underlying assets in a fund will dip in value, it could also be a temporary market over-reaction. Moreover, the fund manager may decide to buy back shares of the fund to remove the discount and restore the fund's value back to its net asset value
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'Discount To Net Asset Value'

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    http://www.investopedia.com/exam-guide/series-7/packaged-securities/net-asset-value-per-share.asp
    ... 4.10 Yield; 4.11 Computing T-bill Discount Yield; 4.12 Accrued Interest. Chapter
    5 ... 6.6 Net Asset Value (NAV); 6.7 Dollar Cost Averaging; 6.8 Mutual Fund Management ...

  • Net Asset Value

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    ... Feedback. Related Videos. Net Asset Value. ... Smarter; PriceRunner; CanDoFinance;
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  • Why do some closed-end mutual funds trade above or below their net ...

    http://www.investopedia.com/ask/answers/145.asp
    ... Intuition tells us that a mutual fund's net asset value (NAV) (the net value of
    all ... fund is trading below this price, it is said to be trading at a discount ...

  • CFA Level 1 Study Guide - Alternative Investments - Net Asset ...

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    ... 11.10 Payback Period; 11.11 Net Present Value (NPV ... Security Valuation; 13.3 The Dividend
    Discount Model (DDM); ... Other Types of Bonds; 14.27 Asset-Backed Securities ...

  • CFA Level 1 Study Guide - Quantitative Methods - Net Present Value ...

    http://www.investopedia.com/exam-guide/cfa-level-1/quantitative-methods/discounted-cash-flow-npv-irr.asp
    ... 11.10 Payback Period; 11.11 Net Present Value (NPV ... Security Valuation; 13.3 The Dividend
    Discount Model (DDM); ... Other Types of Bonds; 14.27 Asset-Backed Securities ...

  • CFA Level 1 Study Guide - Liabilities - Determining The Value Of ...

    http://www.investopedia.com/exam-guide/cfa-level-1/liabilities/lease-asset-value-determination.asp
    ... 11.10 Payback Period; 11.11 Net Present Value (NPV ... Security Valuation; 13.3 The Dividend
    Discount Model (DDM); ... Other Types of Bonds; 14.27 Asset-Backed Securities ...

  • Buying Natural Resources At A Discount

    http://stocks.investopedia.com/stock-analysis/2011/Buying-Natural-Resources-At-A-Discount-ASA-BCX-BGR-CFD-PEO1018.aspx
    ... For example, if a closed-end fund is trading at a 10% discount to its net asset
    value (NAV), you effectively get a dollar's worth of assets for 90 cents. ...

  • CFA Level 1 Study Guide - Corporate Finance - Net Present Value ...

    http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/npv-net-present-value-irr-internal-rate-of-return.asp
    ... 11.10 Payback Period; 11.11 Net Present Value (NPV ... Security Valuation; 13.3 The Dividend
    Discount Model (DDM); ... Other Types of Bonds; 14.27 Asset-Backed Securities ...

  • CFA Level 1 Study Guide - Equity Investments - The Dividend ...

    http://www.investopedia.com/exam-guide/cfa-level-1/equity-investments/ddm-dividend-discount-model.asp
    ... 11.10 Payback Period; 11.11 Net Present Value (NPV ... Security Valuation; 13.3 The Dividend
    Discount Model (DDM); ... Other Types of Bonds; 14.27 Asset-Backed Securities ...

  • Series 7 Study Guide - Debt Securities - Computing T-bill Discount ...

    http://www.investopedia.com/exam-guide/series-7/debt-securities/compute-treasury-discount-yield.asp
    ... 4.10 Yield; 4.11 Computing T-bill Discount Yield; 4.12 Accrued Interest. Chapter
    5 ... 6.6 Net Asset Value (NAV); 6.7 Dollar Cost Averaging; 6.8 Mutual Fund Management ...

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