Net Asset Value

Net asset value is a fund's assets minus its liabilities, divided by the number of units outstanding. In plain terms, it is what one unit of the fund is actually worth.

Mutual funds transact at NAV. Whenever you place the order during the day, it fills at the single price calculated after the market closes — not at a live quote the way shares trade.

With ETFs the market price and NAV move separately. Trading above NAV is a premium and below it a discount; heavily traded ETFs keep that gap very small.

Thinly traded ETFs are where it pays to check. Funds holding overseas assets can drift far from NAV while the local market is shut. Comparing price to NAV before buying is a habit that saves money. When NAV rises, your unit count stays the same and your holding is simply worth more. Paying a distribution lowers NAV by that amount — a fall that is not a loss.