Skip to contents

Financial Dictionary - Net asset value

Net asset value

The net asset value is the value of each unit in an investment fund.

When we decide to invest in an investment fund, we are buying units in that fund; i.e. a piece of the cake. These units have a specific price, which is what we call net asset value. This tells us the performance of the investment fund's returns.

How is net asset value calculated?

The net asset value of an investment fund is calculated by dividing the fund's assets by the number of participants in it. People who are going to invest in an investment fund do not need to calculate this, as fund managers calculate the net asset value of all their funds on a daily basis.

The calculation is:

Net asset value = value of the fund's net assets/number of units in circulation

The fund's assets vary depending on subscriptions and redemptions of fund units. This does not affect the fund's net asset value, as this is maintained through fund contributions and withdrawals. The net asset value is, however, affected by changes in prices and returns for the assets in which the fund has invested. As the value of the fund's assets varies, so does its price. Therefore, the net asset value is the price of a unit on a given day. This is calculated daily.

It is always useful to know this value, as it is the price investors pay for units in investment funds that they want to acquire. It also serves as a reference for the returns on the fund. It therefore gives us an idea of the returns the investor might obtain if they decide to sell their fund units.

If the investor decides to sell their units when their price is higher than when they bought them, the investor makes money on the investment. However, if their price is lower at the time of sale, the investor gets back less than they initially invested. An investment fund works like any other trading process.


Fund finder

Use our investment fund finder to discover the best funds for your investor profile.
Find out more about Fund finder

Socially responsible funds

If you're looking for a return but a social commitment as well, this is the fund for you.
Find out more about Socially responsible funds