Net asset value

Net asset value, or NAV, is the value of one share of a fund: everything the fund owns, minus everything it owes, divided by the number of shares that exist.

For example, if a fund's investments are worth $10,000,000 after subtracting what it owes, and 500,000 shares exist, the NAV is $20.00 per share.

Mutual funds generally calculate NAV at least once every business day, usually after the major US stock exchanges close. An order to buy or sell mutual fund shares is normally priced at the next NAV calculated after the order arrives, not at the price you saw earlier. Exchange-traded funds also report a NAV, but their shares trade during the day at prices that can be above or below it. NAV rises and falls with the value of the fund's holdings, and that value can fall.