Net Asset Value (NAV) represents the per-share accounting value of a fund on a given day. It is the result of taking the fund's total assets, subtracting liabilities, and dividing by the number of shares outstanding. NAV is a central reference point for evaluating a fund's value and is used in determining proceeds from redeeming or creating shares.
For mutual funds, NAV is typically calculated once per trading day after the market closes. For exchange-traded funds (ETFs), the NAV is also calculated daily, but ETF shares trade on an exchange throughout the day at market prices that can differ from the NAV. An intraday reference price, often called the intraday indicative value (IIV), provides a real-time estimate that helps traders gauge how the NAV compares to the trading price.
NAV serves as the standard basis for valuing fund investments and reporting performance. It is used when investors redeem or create fund shares and when funds disclose performance, expense ratios, and asset composition. While NAV reflects the value of the fund's holdings, market prices for ETF shares and other fund structures may diverge from the NAV due to supply and demand, liquidity, or tracking differences. NAV is also affected by how assets are valued (marked to market) and by any liabilities the fund records.
NAV is an accounting measure and not a guaranteed or exact trade price. For funds that trade intraday or have complex holdings, the market price or IIV can differ from the reported NAV, influencing perceived value during the day.
A mutual fund with total assets of $1.2 billion, liabilities of $10 million, and 60 million shares outstanding has an NAV per share of (1.2B - 10M) / 60M ≈ $19.83.
Mutual fund · Exchange-traded fund (ETF) · Net asset value per share · Intraday indicative value (IIV) · Fund accounting · Share class