Net Asset Value (NAV)
The per-share value of a mutual fund or ETF, calculated as total assets minus total liabilities divided by shares outstanding.
What is NAV?
Net asset value (NAV) is the per-share market value of a mutual fund, ETF, or other pooled investment vehicle, calculated by subtracting total liabilities from total assets and dividing by the number of outstanding shares. For mutual funds, NAV is calculated once daily after the 4pm EST market close, and all orders received that day execute at the closing NAV. For ETFs, NAV is calculated daily but the ETF's market price fluctuates continuously — small premiums or discounts to NAV may arise. NAV is also used in private equity and hedge fund reporting as the current fair value of a fund's portfolio net of fees and liabilities.
Example
A mutual fund holds 100 stocks with a combined market value of $500 million at 4pm. The fund has $5 million in liabilities (accrued fees). With 50 million shares outstanding, NAV = ($500M - $5M) / 50M = $9.90 per share. An investor who submits a buy order at any point during the day will receive shares at this $9.90 NAV.
Source: SEC — Net Asset Value