Net Asset Value (NAV)

Refers to the amount by which the value of all of the assets of a fund exceeds all debt and liabilities of the fund. The value of assets and liabilities can be determined in accordance with GAAP or other accounting or valuation metrics. This is sometimes the same as the book value of a business. NAV represents the total equity of the firm; if divided by the number of outstanding shares it is the net asset value per share of the business. Mutual funds generally must calculate their NAV at least once every business day, typically after the major U.S. exchanges close. A closed-end fund, whose shares generally are not "redeemable"—that is, not required to be repurchased by the fund—is not subject to this requirement. The share price of a mutual fund is based on its NAV. That is, the price that investors pay to purchase mutual fund is the approximate per share NAV, plus any fees that the fund imposes at purchase (such as sales loads or purchase fees). The price that investors receive on redemptions is the approximate per share NAV at redemption, minus any fees that the fund deducts at that time (such as deferred sales loads or redemption fees).