A mutual funds net asset value, or NAV, is the daily market value of the fund's portfolio of investments, minus the liabilities of the fund, and this is expressed as a per share value. The NAV is calculated daily, following the close of trading, and in some cases funds will update their NAV several times during the day.
The offering price for the mutual fund, is the NAV to which a sales fee is added. Open ended mutual funds sell shares at this public offering price (POP) and redeem their shares at the NAV price. For this reason orders are processed after the NAV is computed at the end of trading for the day. Closed end funds which trade on the market daily may trade at a price above(at a premim) or below(at a discount) the NAV price.
Some funds have several classes of shares and in this case each class of shares will have its own NAV, which depends on the difference in fees and expenses paid by the different classes of shares.
A mutual fund may own securities which are not traded on any exchange. These could be shares in small or bankrupt companies; they could also be derivatives; or they might be private investments in non registered financial investments (an example would be stock in a private company). When there is no public market for trading in these securities, the fund management must make an estimate of their present value in order to calculate the NAV of the fund. The quantity of the funds assets which can be invested in these securities must be stated in the fund's prospectus.
The NAV (net asset value) per share, is computed by dividing the fund's total assets minus any liabilities by the number of outstanding shares. This NAV is computed at the end of trading daily.
At our website you will find complete information about NAV of mutual funds:Mutual fund NAV
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