Net Asset Value - NAV

Loading the player...

DEFINITION of 'Net Asset Value - NAV'

A mutual fund's price per share or exchange-traded fund's (ETF) per-share value. In both cases, the per-share dollar amount of the fund is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding.

BREAKING DOWN 'Net Asset Value - NAV'

In the context of mutual funds, NAV per share is computed once a day based on the closing market prices of the securities in the fund's portfolio. All mutual funds' buy and sell orders are processed at the NAV of the trade date. However, investors must wait until the following day to get the trade price.

Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not the best gauge of mutual fund performance, which is best measured by annual total return.

Because ETFs and closed-end funds trade like stocks, their shares trade at market value, which can be a dollar value above (trading at a premium) or below (trading at a discount) NAV.

RELATED TERMS
  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. Costs And Expenses

    As related to mutual funds, it is one of the principal criteria ...
  3. Net Asset Value Per Share - NAVPS

    An expression for net asset value that represents a fund's (mutual, ...
  4. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  5. Net Current Asset Value Per Share ...

    A value created by professor Benjamin Graham in the mid-twentieth ...
  6. Expense Ratio

    A measure of what it costs an investment company to operate a ...
Related Articles
  1. Investing Basics

    How liquid are Fidelity mutual funds?

    Review the liquidity features of mutual fund shares and an overview of Fidelity mutual funds. Most investors look for convenient access to their investments.
  2. Mutual Funds & ETFs

    The Top 5 Global Equity ETFs for 2016 (IXJ, VT)

    Take a closer look at five global equity ETFs poised to do well in 2016, and learn why there are always opportunities for investors worldwide.
  3. Mutual Funds & ETFs

    GLD: iShares Gold Trust ETF

    Learn about the SPDR Gold Shares ETF, how it tracks the price of gold, and what type of investors may want to hold shares in their portfolios.
  4. Mutual Funds & ETFs

    Mutual Funds Designed for Wealthy Investors

    Learn about the important qualities of mutual funds for wealthy investors and several mutual funds that have low fees and low turnover rates.
  5. Mutual Funds & ETFs

    5 Secrets You Didn’t Know About Mutual Funds

    Learn five of the "secrets" about mutual funds that can have a significant impact on mutual fund choices and investor profitability.
  6. Mutual Funds & ETFs

    Trading Mutual Funds For Beginners

    Learn about the basics of trading and investing in mutual funds. Understand how the fees charged by mutual funds can impact the performance of an investment.
  7. Mutual Funds & ETFs

    Best Performing Mutual Funds in the Last 10 Years

    Learn more about the top four best-performing mutual funds based on their total percentage investment return for the past 10 years.
  8. Mutual Funds & ETFs

    Comparing ETFs Vs. Mutual Funds For Tax Efficiency

    Explore a comparison of mutual funds and exchange-traded funds, or ETFs, and learn what makes ETFs a significantly more tax-efficient investment.
  9. Investing Basics

    Real Estate Investing in a High-Interest-Rate Environment

    Learn how private real estate investing and public real estate investing (or investing in REITs) is affected by a high-interest rate environment.
  10. Mutual Funds & ETFs

    USDU: WisdomTree Bloomberg US Dllr Bullish ETF

    Explore an analysis of information on the WisdomTree Bloomberg U.S. Dollar Bullish Fund, a currency ETF that tracks the overall performance of the U.S. dollar.
RELATED FAQS
  1. How liquid are BlackRock mutual funds? (BLK)

    BlackRock, Inc. (NYSE: BLK) mutual funds are very liquid, as are all mutual funds. An investor receives payment for a redemption ... Read Full Answer >>
  2. How liquid are Vanguard mutual funds?

    The Vanguard mutual fund family is one of the largest and most well-recognized fund family in the financial industry. Its ... Read Full Answer >>
  3. How often are mutual fund prices updated?

    A mutual fund's price, or its net asset value (NAV), is determined once a day after the markets close at 4 p.m. Eastern time ... Read Full Answer >>
  4. How do dividends affect net asset value (NAV) in mutual funds?

    Distribution of dividends reduces the net asset value (NAV) of mutual fund shares. However, this doesn't mean that fund investors ... Read Full Answer >>
  5. What are the advantages of investing in ETFs with high trading volume?

    The advantages of investing in an exchange-traded fund (ETF) with high trading volume are increased liquidity, great parity ... Read Full Answer >>
  6. What is the difference between exchange traded funds (ETFs) and closed end funds?

    Investors have a number of options available to them when it comes to investing in pooled funds. While mutual funds offer ... Read Full Answer >>
  7. What can cause an asset to trade below its market value?

    An asset may trade below its market value due to a lack of demand for the asset in the marketplace, a perception or belief ... Read Full Answer >>
  8. What is the difference between a modified duration and a Macaulay duration?

    Individuals have a handful of options for places to keep the funds they wish to keep guarded from the volatility and risk ... Read Full Answer >>
  9. How do I calculate the loan-to-value ratio using Excel?

    Investors have a variety of pooled fund investment options, including mutual funds and money market funds, that can meet ... Read Full Answer >>
  10. How do I purchase shares of a closed-end investment?

    Unlike open-end mutual funds that sell shares in the fund directly to investors, closed-end funds are traded on an exchange ... Read Full Answer >>
  11. How often should I be checking the NAV of my mutual fund shares?

    You can check the net asset value (NAV) of your mutual fund shares anywhere from daily to annually. It is commonly recommended ... Read Full Answer >>
  12. What is the difference between book value per common share and NAV (net asset value)?

    Book value per common share, also known as book value per equity of share or BVPS, is used to evaluate the stock price of ... Read Full Answer >>
  13. Is NAV the best way to assess the value of an REIT?

    The net asset value (NAV) is an excellent metric to use when assessing the value of a real estate investment trust (REIT). A ... Read Full Answer >>
  14. What is a mutual fund's NAV?

    Net asset value (NAV) represents a fund's per share market value. This is the price at which investors buy ("bid price") ... Read Full Answer >>
  15. Why do some closed-end mutual funds trade above or below their net asset values?

    Intuition tells us that a mutual fund's net asset value (NAV) (the net value of all assets within the mutual fund's portfolio ... Read Full Answer >>
  16. How do you find out the price of a mutual fund?

    The easiest way to find out the price of a mutual fund is to look at its net asset value (NAV). NAV is the total value of ... Read Full Answer >>
Hot Definitions
  1. Short Selling

    Short selling is the sale of a security that is not owned by the seller, or that the seller has borrowed. Short selling is ...
  2. Harry Potter Stock Index

    A collection of stocks from companies related to the "Harry Potter" series franchise. Created by StockPickr, this index seeks ...
  3. Liquidation Margin

    Liquidation margin refers to the value of all of the equity positions in a margin account. If an investor or trader holds ...
  4. Black Swan

    An event or occurrence that deviates beyond what is normally expected of a situation and that would be extremely difficult ...
  5. Inverted Yield Curve

    An interest rate environment in which long-term debt instruments have a lower yield than short-term debt instruments of the ...
  6. Socially Responsible Investment - SRI

    An investment that is considered socially responsible because of the nature of the business the company conducts. Common ...
Trading Center