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What Is the Net Asset Value Per Share (NAV)?

NAVPS, or net asset value per share, represents the total per-share value of mutual funds, ETFs, REITs and closed-end funds. You can calculate NAVPS by dividing a company’s net asset value (assets minus liabilities) by its outstanding shares. 

Understanding the net asset value per share (NAV)

A fund’s net asset value (NAV) measures its total value by subtracting liabilities from assets. Liabilities include costs like short- and long-term debts, employee salaries, and administrative costs. Assets may include invested securities, cash, and accounts receivable. 

A fund’s NAV is used to calculate its NAVPS, or net asset value per share. The NAVPS represents a fund’s value according to how much each individual share is worth. 

How does the NAVPS work?

For mutual funds, the NAVPS functions similarly to stock prices, since they only trade once per day. Generally, mutual fund shares trade around the NAV, plus or minus fees. Because their assets, liabilities and outstanding shares frequently fluctuate, they’re required to calculate their NAV after market close daily. 

ETFs and closed-end funds work a bit differently. Unlike mutual funds, these assets trade like stocks during the day, rather than once at close. That means their trading price may diverge from their NAV. As such, these funds tend to update NAVs during open markets, with a final daily NAV calculated after close. 

Calculating NAVPS

To calculate a fund’s NAVPS, you first have to find its NAV by subtracting liabilities from assets. Then, you have to divide that value by the number of outstanding shares:

NAVPS = assets - liabilitiesoutstanding shares

Say that Z Corp is a mutual fund with 5 million outstanding shares. The fund boasts $100 million in investments and $16 million in cash and accounts receivable. Z Corp also holds $20 million in short-term liabilities, $10 million in long-term liabilities and pays $1 million in administrative costs. 

In this example:

  • Assets = $116 million ($100 million + $16 million)
  • Liabilities = $31 million ($20 million + $10 million + $1 million)

So, our equation would look like this:

NAVPS = $116 million - $31 million5 million outstanding shares = $17

Bear in mind that this NAVPS is only accurate on the day of calculation due to shifting values and share counts. 

How a fund’s NAV impacts you

Investors often rely on NAVs and NAVPS to analyze a fund’s value. For example, you can compare a fund’s NAV against industry benchmarks and the broader market. You can also use it to compare two funds against each other. 

That said, the variables that impact a fund’s worth can make for an uneven comparison. Each fund may contain different kinds and numbers of assets and incur a range of administrative costs. For a more accurate analysis, it’s best to consider each fund’s history and unique inner workings, too. 

What this means for you

Understanding NAVPS can help you analyze the value of mutual funds, ETFs and other funds. Still, it’s an imperfect metric, and like all analytical tools, requires you to look at the broader picture. 

Fortunately for investors, our artificial intelligence does the hard work for you. All you have to do is select an Investment Kit to get started. 

Disclosures is the trade name of Quantalytics Holdings, LLC., LLC is a wholly-owned subsidiary of Quantalytics Holdings, LLC ("Quantalytics"). Quantalytics offers automated financial advice tools through Quantalytics Investment Advisors, LLC ("QAI"), an SEC-registered investment advisor. QIA’s investment advisory services are ONLY available only to residents of the United States. Disclosures concerning QIA’s investment advisory services are available on its Form ADV filed with the SEC. The content in this newsletter is for informational purposes only and does not constitute a comprehensive description of's investment advisory services.

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