The value of a single share of a mutual fund. Calculated by subtracting the fund's total LIABILITIES from its total ASSETS and dividing the result by the OUTSTANDING SHARES. Also known as Average Price.
Net asset value (NAV)
1. It is defined as the value of a fund’s assets minus the value of its liabilities.
2. The term “net asset value” is commonly used with mutual funds and is used to determine the value of the assets held.
NAVPS = Net Assets / Number of Shares Outstanding
Let’s presume that at the close of yesterday’s trading, the company ABC mutual fund held securities worth $10,500,000, cash of $1,000,000, and liabilities worth $500,000. If the fund held 1,000,000 shares outstanding,
Then yesterday’s NAVPS would be calculated as:
NAVPS = ($10,500,000 + $1,000,000 - $500,000) / 1,000,000 = $11.00