Homonym: NAV (Navigation)
NAV, or Net Asset Value, is a financial term used to determine the value of an investment fund, such as a mutual fund or an exchange-traded fund (ETF). It is calculated by taking the total value of the fund's assets, subtracting any liabilities, and then dividing by the number of outstanding shares. This gives investors a clear picture of the fund's worth at a specific point in time.
Investors often use NAV to assess the performance of a fund and to make informed decisions about buying or selling shares. A rising NAV indicates that the fund's assets are increasing in value, while a declining NAV may signal potential issues. Understanding NAV helps investors evaluate their investment options effectively.