NAV stands for net asset value, which is the fund’s share price (not to be confused with the purchase price). NAVs come directly from the fund company and are given out and calculated daily, weekly, and monthly. Because ETFs trade on an exchange, the fund's NAV may not be equal to its market price. Funds compute this value by dividing the total net assets by the total number of shares.
Benefits
NAV updates offer a way of tracking the value of an investment. Changes in NAV can reveal capital appreciation (increase) or depreciation (decrease). Investors should note that a drop in NAV is not necessarily cause for concern. NAV will fall any time a fund makes a distribution. If your fund’s NAV has dropped considerably, determine if a distribution payout was responsible, and check the fund’s most recent total-return and NAV-change figures. Because NAVs fluctuate regularly, funds rely upon total return, and not just share-price change, to gauge fund performance.
An investor can measure the amount of principal gained by multiplying the NAV by the number of shares held. This assumes that the share amount and the NAV used are from the end of the same month.
Origin
These data come directly from the fund company.