What does NAV stand for?

NAV stands for Net Asset Value. This term is crucial in the context of investment funds, like mutual funds or exchange-traded funds (ETFs). NAV represents the total value of the fund’s assets minus the total value of its liabilities, divided by the number of outstanding shares. This provides a per-share value that investors can use to understand the price at which shares of the fund are bought and sold.

Understanding NAV is important for investors as it reflects the current value of their investment in the fund. A higher NAV indicates a more valuable fund and can suggest better performance, while a decreasing NAV may indicate potential issues within the fund. By focusing on Net Asset Value, investors can make informed decisions based on the actual value of the fund’s investments, rather than just market price fluctuations.