Determining the net asset value (NAV) of an investment fund is crucial for investors seeking to assess its underlying value. NAV represents the per-share value of a fund’s total assets minus its liabilities, providing a snapshot of its financial health. For instance, a mutual fund with $100 million in assets and $10 million in liabilities would have a NAV of $9 per share if it had 10 million shares outstanding.
NAV is essential for evaluating a fund’s performance, comparing it to similar funds, and making informed investment decisions. Historically, NAV was calculated manually, but advancements in technology have automated the process.