Net Asset Value (NAV) is the total value of a fund’s assets minus its liabilities. It is used to determine the per-share value of a mutual fund, hedge fund, or other pooled investment vehicle. NAV is often calculated daily or periodically and is a key metric for investors to assess the performance of a fund.
The working price tag on a fund’s balance sheet, struck by totalling every asset at its prevailing fair value and subtracting liabilities down to the last accrued fee. For open-ended vehicles the figure divides by outstanding shares or units, minting the subscription and redemption price that governs daily cash in- and out-flows. Administrators feed the calculation with market closes for listed instruments and model-weighted estimates for Level-three holdings, all time-stamped to a valuation point fixed in the prospectus.
Corporate-action accruals, performance fees, swing-pricing triggers, and foreign-exchange translations adjust the mix before control totals lock the number and auditors sign the tie-out. A clean NAV keeps dilution risk in check, aligns performance records across vintages, and underpins leverage covenants that key off asset coverage ratios.
