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Mutual-Fund
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Definition of 'Net Asset Value'


Definition: Net asset value(NAV) is the value of a fund's asset less the value of its liabilities per unit.

NAV = (Value of Assets-Value of Liabilities)/number of units outstanding

Description: NAV is often associated with mutual funds, and helps an investor determine if the fund is overvalued or undervalued. When we talk of open-end funds, NAV is crucial. NAV gives the fund's value that an investor will be entitled to at the time of withdrawal of investment. In case of a close-end fund, which is a mutual fund with fixed number of units, price per unit is determined by market and is either below or above the NAV.

Also See: Mutual Fund, Close-end Fund, Open-end Fund, Debt Fund, Hybrid Fund, Commodity Fund, ETF

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