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Net Asset Value (NAV)

What is Net Asset Value (NAV)?

The per-share value of a fund's holdings, calculated as total assets minus liabilities divided by shares outstanding, used to price mutual funds and track ETFs.

Overview

Net asset value (NAV) is the per-share value of a fund's holdings: the fund's total assets minus its liabilities, divided by the number of fund shares outstanding. It is the price at which mutual fund shares are bought and sold, and the benchmark an ETF's market price is measured against.

Mutual funds calculate NAV once per trading day, after the market closes, and all orders received before the cutoff are filled at that price. ETFs also publish an official NAV each day, but their shares trade on an exchange at market prices that can sit slightly above or below NAV. NAV for a fund plays a similar role to book value per share for a company, except that fund assets are marked to market every day.

Also Known As: NAV per Share, Net Asset Value per Share (NAVPS)

Formula

NAV = (Total Assets − Total Liabilities) ÷ Shares Outstanding

Premium or Discount = (Market Price − NAV) ÷ NAV

Formula Components:

Total Assets
Securities at their closing market values, plus cash, accrued interest, dividends receivable, and other receivables
Total Liabilities
Accrued management fees and other expenses, payables for securities purchased, and any borrowings
Shares Outstanding
The number of fund shares in issue. For ETFs this changes as shares are created or redeemed

Fees and NAV: A fund accrues its expenses daily as a liability, so the expense ratio is reflected in NAV continuously rather than charged separately. Distributions reduce NAV by the amount paid on the ex-dividend date.

Calculation Example

A hypothetical ETF at the market close:

Fund ABC - End-of-Day Data:

Securities at Market Value$2,000 million
Cash and Receivables$10 million
Accrued Fees and Payables$10 million
Shares Outstanding40 million

Step 1: Net asset value per share

NAV = ($2,000M + $10M − $10M) ÷ 40M

NAV = $2,000M ÷ 40M

= $50.00 per share

Step 2: Premium or discount

Closing price $50.10: ($50.10 − $50.00) ÷ $50.00 = +0.20% (premium)

Closing price $49.75: ($49.75 − $50.00) ÷ $50.00 = −0.50% (discount)

Result: Each share represents $50.00 of net assets. A buyer paying $50.10 pays 0.20% more than the underlying holdings are worth; a buyer at $49.75 pays 0.50% less.

How to Interpret

NAV on its own says nothing about whether a fund is cheap or expensive. A $20 NAV fund is not a better deal than a $200 NAV fund; what matters is how NAV changes over time, including distributions, and for exchange-traded funds, how closely the market price tracks it.

ETF Premiums and Discounts:

Price Close to NAV

The normal state for ETFs holding liquid securities. Authorized participants create shares when the price is above NAV and redeem them when it is below, which pulls the price back toward NAV.

Small, Temporary Gaps

Common for ETFs holding bonds or foreign stocks. When the underlying market is closed or thinly traded, the ETF price may reflect new information that the last official NAV does not yet include.

Wide or Persistent Gaps

Can appear during market stress, in thinly traded ETFs, or when creations are restricted. Closed-end funds, which have no creation and redemption process, often trade at lasting premiums or discounts.

Intraday value: During the trading day, an indicative NAV (often called iNAV or IIV) estimates the value of the ETF's basket in real time. Using limit orders and comparing the price with this estimate helps avoid paying a large premium.

NAV and FinSpry ETF Data

Prices on FinSpry ETF pages and in the ETF screener are exchange market prices, not NAV. For a fund's official daily NAV and its premium or discount history, check the issuer's website. FinSpry does show related fund data, including each ETF's expense ratio and assets under management.

Limitations

  • Stale prices: holdings that trade rarely or in other time zones are valued using last trades or fair-value estimates, so NAV can lag reality.
  • Snapshot only: the official NAV is struck once a day and does not capture intraday moves.
  • Not a performance measure: NAV falls when a fund pays a distribution, so NAV change alone understates the return; total return adds distributions back.
  • Not a valuation signal: a fund trading at NAV is fairly priced relative to its holdings, but that says nothing about whether the holdings themselves are attractively priced.

Related Fund Metrics

These terms connect to how a fund is valued:

Assets Under Management (AUM)

The fund's total size. NAV per share multiplied by shares outstanding gives total net assets.

Expense Ratio

The annual fee, accrued daily against NAV.

Book Value per Share

The company equivalent: shareholders' equity divided by shares outstanding, based on accounting values.

Total Stock Return

Price change plus distributions, the right way to measure a fund's performance rather than NAV alone.

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