Glossary
From A to Z all the terms you need to skip the jargon and get started!
Net Asset Value (NAV)
Net Asset Value (NAV) is the per-share value of a mutual fund, exchange-traded fund (ETF), or closed-end fund. 💰
It is calculated by subtracting the fund's liabilities from its total assets, and then dividing the result by the number of shares outstanding. NAV is an essential metric for investors, as it reflects the fund's underlying value and is used to determine the price at which shares are bought or sold.
For example, if a mutual fund has $100 million in assets, $10 million in liabilities, and 5 million shares outstanding, its NAV would be ($100 million - $10 million) / 5 million = $18 per share.
Fun fact: The NAV of a mutual fund or ETF is calculated at the end of each trading day 🌅 based on the closing market prices of the underlying assets held in the fund's portfolio. This is different from stocks, whose prices can change throughout the trading day.