How Do You Spell NAV?
Pronunciation: [nˈav] (IPA) 
Pronunciation: [nˈav] (IPA)
NAV, an acronym for Net Asset Value, refers to the value of a company's or mutual fund's assets minus its liabilities. It serves as a key indicator of the worth of a particular investment fund or security. Calculated on a per-share basis, the NAV allows investors to determine the intrinsic value of their holdings.
NAV is an essential metric used in the investment industry to gauge the performance and value of a mutual fund, exchange-traded fund (ETF), or closed-end fund. It is calculated by dividing the total value of all the fund's investments, including cash and securities, by the number of outstanding shares. This calculation provides investors with an accurate assessment of the fund's value.
This figure is particularly crucial for investors interested in purchasing or selling mutual funds, as it represents the price at which shares are bought or sold. Investors who purchase shares at a price lower than the NAV would generally acquire them at a discount, while those who pay more than the NAV buy at a premium.
Moreover, the NAV allows investors to assess the performance of a fund over time, comparing its current NAV to its historical NAV. Changes in the NAV reflect the fund's gains or losses, driven by fluctuations in the value of its underlying investments. Investors often monitor these changes to evaluate the fund's performance and make informed decisions regarding their investments.
