Not logged in, please login to view portfolio!

Blog Mutual Funds

Net Asset Value (NAV)

Sarmaaya Desk
Sarmaaya Content Team

Key Takeaways

  1. Net Asset Value represents the net ‘value’ of any entity
  2. In the context of mutual funds, Net Asset Value (NAV) represents the share price per unit
  3. It is calculated by dividing the difference between assets and liabilities with total number of shares outstanding
  4. Net Asset Value (NAV) is used in the context of valuation of funds and pricing.

What is Net Asset Value?

Net Asset Value represents the net ‘value’ of any entity. In the context of mutual funds, NAV represents the share price per unit and is more commonly used to identify potential investment opportunities in mutual funds, ETFs or indexes.

Calculating Net Asset Value

Calculating Net Asset Value is very easy and is as follows:

NAV = (assets – liabilities)/ Total number of outstanding shares

For a given mutual fund, we are given the following data:


  • Value of Securities = $75m
  • Cash and equivalents = $20m
  • Accrued income = $10m
  • Accrued Expense = $2m
  • Total Liabilities = $12m
  • Shares outstanding = 1000

NAV = [(75+20+10)-(2+12)]/1000

NAV = [105-14]/100

NAV = 0.91


Understanding Net Asset Values

In the context of companies and organizations, ‘net asset’ is the difference between the said company’s total number assets and liabilities. NAV, however, is used in the context of valuation of funds and pricing – which then, in turn, means the difference between assets and liabilities divided by shares owned by investors. NAV, therefore, represents the per-share value of a fund, thereby making valuation and transaction easier.

Net Asset Value is usually close or equal to the company’s book value. It is more commonly used in comparison to market capitalization to determine whether or not an investment is overvalued or undervalued. It represents a fund’s market value and provides investors with a reference point around which they can determine to either buy or sell shares of funds


Related articles

Blog Mutual Funds

Where Mutual Funds invested in December 2020?

Mutual Funds Managers are money managers who invest in stocks on behalf of all the investors. Money Manager is also known as Asset Management Company (AMC). They handle the funds, allocate the assets in a way that produces capital gains for the investors thus, providing them with an income. The value of a mutual fund company depends on the securities it decides to buy.

Read the story
Blog Mutual Funds

Equity to Assets Ratio

The Equity to Asset ratio is the measure of the equity that a company or a business has compared against the total assets owned by the company or the business.

Read the story

My Watchlist

Not logged in, please login to view watchlist!

Sarmaaya was founded in 2017 by Laeeq Ahmad, and created in response to the non-existence of a web-based platform that could audit traders globally and at the same time; enable traders to share their knowledge with people interested in their strategies.


abcData (Pvt) Limited (Sarmaaya) is a Pakistan Stock Exchange (PSX) authorized data redistributor. Sarmaaya & CS Solutions (Pvt.) Limited (CS) do not guarantee the timeliness, accurateness, or completeness of any data or information on the website. Sarmaaya & CS makes no warranties, express or implied, as to Sarmaaya & CS or any data or values relating thereto or results to be obtained therefrom, and expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect thereto. To the maximum extent allowed by law, Sarmaaya & CS, its licensors, and their respective employees, contractors, agents, suppliers and vendors shall have no liability or responsibility whatsoever for any injury or damages – whether direct, indirect, consequential, incidental, punitive or otherwise – arising in connection with Sarmaaya & CS or any data or values relating thereto – whether arising from their negligence or otherwise. Nothing in the website shall constitute or be construed as an offering of financial instruments or as investment advice or investment recommendations (i.e., recommendations as to whether or not to “buy”, “sell”, “hold”, or to enter or not to enter into any other transaction involving any specific interest or interests) by Sarmaaya & CS or a recommendation as to an investment or other strategy by Sarmaaya & CS. Data and other information available via the website should not be considered as information sufficient upon which to base an investment decision.