Net Asset Value (NAV)

Net Asset Value (NAV) is the value per Share of a mutual fund or an exchange-traded fund (ETF), calculated by taking the total Assets of the fund, subtracting its total liabilities, and dividing by the number of Shares/">Outstanding Shares. NAV is used to determine the price at which Shares of the fund will be bought or sold.

Formula: NAV = (Total Assets – Total Liabilities) / Total Shares/">Outstanding Shares

Example 1: If a mutual fund has total Assets of $10 million and total liabilities of $2 million with 1 million Shares/">Outstanding Shares, the NAV would be:

• NAV = ($10,000,000 – $2,000,000) / 1,000,000 = $8 per Share

Example 2: A real estate investment Trust (REIT) has total Assets of $50 million, total liabilities of $20 million, and 5 million Shares outstanding. The NAV would be:

• NAV = ($50,000,000 – $20,000,000) / 5,000,000 = $6 per Share

NAV is typically calculated at the end of each trading day, reflecting the fund’s performance and allowing investors to make informed decisions.