Quick answer
Net asset value (NAV) is an investment company's total assets minus its total liabilities. Per-share NAV is that figure divided by the number of shares outstanding, and it is the basis for mutual fund share prices [1].
#How is NAV calculated?
There are two steps. First, subtract what the fund owes from what it owns. Then divide by the number of shares investors hold. Investor.gov gives the example of a fund with $100 million of NAV and 10,000,000 shares, which works out to a per-share NAV of $10 [1].
Worked example
Working out per-share NAV
A fund holds securities and cash worth $250 million and owes $2 million (for example, fees it has not yet paid). Investors own 12.4 million shares.
- NAV ($250,000,000 − $2,000,000)
- $248,000,000
- Per-share NAV ($248,000,000 ÷ 12,400,000)
- $20.00
- Cost of 100 shares at NAV (100 × $20.00)
- $2,000, plus any purchase fees
Because the value of the holdings and the share count both change, the per-share NAV is recalculated each business day.
Hypothetical fund for illustration.
#When is NAV calculated?
Mutual funds and unit investment trusts generally must calculate NAV at least once every business day, typically after the major U.S. exchanges close [1]. When you buy, you pay the next calculated NAV plus any purchase fees; when you sell, you receive the next calculated NAV minus any redemption fees [2]. That is why a mutual fund order placed at noon does not get a noon price.
#How is NAV different for ETFs?
ETFs also have a NAV, but investors trade ETF shares on exchanges at market prices that may or may not equal NAV. Investor.gov notes that an ETF's market price may sit at a premium or a discount to NAV, so you may pay more or less than NAV [3]. If an ETF trades at $20.10 while its NAV is $20.00, the premium is 0.5%.
| Fund type | Price you trade at |
|---|---|
| Mutual fund | Next calculated per-share NAV, plus or minus any fees |
| ETF | Market price on the exchange, which can be above or below NAV |
| Closed-end fund | Not required to calculate NAV every business day; shares are generally not redeemable |
Related terms
Frequently asked questions
Does a fund's NAV go down when it pays fees?
Yes. Funds deduct fees and expenses from fund assets, so those costs reduce NAV and therefore the value of each share [2].
Why does NAV change every day?
The market value of the fund's holdings changes, and so does the number of shares as investors buy and sell. Both feed into the daily per-share figure.
Sources
Grade A = primary source (regulator, government agency, official rulebook or the index provider's own documents). Numbers in brackets in the text point here.
- U.S. SEC — Investor.gov. Net Asset Value (glossary) (2026). Accessed 2026-10-03.A
- U.S. SEC — Investor.gov. Mutual Funds (2026). Accessed 2026-10-03.A
- U.S. SEC — Investor.gov. Exchange-Traded Funds (ETFs) (2026). Accessed 2026-10-03.A
This page is general education, not personal financial, tax or legal advice. Figures in worked examples are hypothetical and calculated before taxes and fees unless stated. Rules and limits change; check the linked primary sources for the current version. How we check every page.
