Net asset value

A term commonly used to describe the value of a unit or a share in a collective investment fund such as a mutual fund or an investment company, in which a pool of investments is collectively held by different investors. The value of each investor’s stake is calculated by multiplying the number of units or shares held by the net asset value. The NAV is calculated by taking the net present value of all assets held, and deducting all liabilities (including, for example, short positions). NAVs are normally calculated on each business day, but some funds with less liquid investments (e.g., private equity) may issue NAVs weekly, monthly or even less frequently. See mutual fund.