Legal Definitions - NAV

Term: NAV

Definition: NAV stands for Net Asset Value. It is the value of a mutual fund's assets minus its liabilities, divided by the number of shares outstanding. It represents the price per share of the mutual fund.

Example: If a mutual fund has assets worth $100 million and liabilities worth $10 million, and there are 5 million shares outstanding, the NAV would be $18 ($90 million divided by 5 million shares).

Explanation: The NAV is an important metric for investors as it helps them understand the value of their investment in a mutual fund. It is calculated daily and represents the price per share of the mutual fund. If the NAV increases, it means the value of the mutual fund has gone up, and vice versa.