Net Asset Value Per Share – NAVPS Definition

Closed-End Fund

What is the NAV per share – NAVPS?

The NAV per share (NAVPS) is an expression of the NAV which represents the value per share of a mutual fund, an exchange-traded fund (ETF) or a closed-end fund. It is calculated by dividing the total net asset value of the fund or the company by the number of shares in circulation and is also called book value per share.

The NAVPS-NAV formula is


Net asset value per share=NAVOutstanding sharesor:NAV=Assetsliabilities begin {aligned} & text {Net asset value per share} = frac { text {NAV}} { text {Outstanding shares}} \ & textbf {where:} \ & text {NAV} = text {Assets} – text {Passives} \ end {aligned}

TheNet asset value per share=Outstanding sharesNAVTheor:NAV=AssetsliabilitiesTheThe

How to calculate the NAV per share – NAVPS

The NAV per share (NAVPS) is calculated by dividing the NAV by the number of shares outstanding.

What does NAVPS tell you?

NAV per share (NAVPS) is often used for mutual funds or mutual funds because shares of these funds registered with the U.S. Securities and Exchange Commission (SEC) are redeemed at their value Net asset.

Referring to the NAV per share (NAVPS) formula above, assets include the total market value of the fund’s investments, cash and cash equivalents, accounts receivable and receivables. Liabilities are the total of short-term and long-term liabilities, plus any accrued liabilities, such as staff salaries, utilities and other operating expenses. The total number of expenses can be significant, as management fees, distribution and marketing fees, transfer agent fees, custodian and verification fees can all be included.

Key points to remember

  • NAVPS represents the value per share of a mutual fund, an ETF or a closed-end fund.
  • It is often used in connection with open-ended mutual funds because the shares are redeemed at their net asset value.
  • However, market prices and net asset values ​​may vary for closed-end funds and ETFs.

Example of use of the NAV per share – NAVPS

Consider a mutual fund with 7.5 million shares outstanding, investments of $ 500 million, $ 15 million in cash, $ 1.5 million in accounts receivable and receivables of $ 250,000. As for liabilities, the fund has $ 20 million in short-term liabilities and $ 5 million in long-term liabilities. The fund has $ 35,000 of operating expenses payable and $ 15,000 of other accrued expenses. Assets, liabilities and NAVPS are calculated as follows:


Assets= $500,000,000+$15,000,000+$1,500,000Strengths =+ $250,000=$516,seven50,000liabilities= $20,000,000+$5,000,000+$35,000liabilities=+ $15,000=$25,050,000NAVPS= $516,seven50,000$25,050,000seven,500,000= $491,seven00,000seven,500,000=$65.56 begin {aligned} text {Assets} = & $ 500,000,000 + $ 15,000,000 + $ 1,500,000 \ phantom { text {Assets =}} & + $ 250,000 = $ 516,750,000 \ text {Passive} = & $ 20,000,000 + $ 5,000,000 + $ 35,000 \ ghost { text {Passive} =} & + $ 15,000 = 25 $ 250,000 \ text {NAVPS} = & frac { 516 $ 750,000 – 25,250,000,000 $} 7,500,000 $} \ = & frac { $ 491,700,000} {7,500,000} = $ 65.56 end {aligned}

Assets=Strengths =liabilities=liabilities=NAVPS==The $500,000,000+$15,000,000+$1,500,000+ $250,000=$516,seven50,000 $20,000,000+$5,000,000+$35,000+ $15,000=$25,050,000 seven,500,000$516,seven50,000$25,050,000The seven,500,000$491,seven00,000The=$65.56TheThe

For mutual funds and ETFs, NAVPS is often readily available on sites like Morningstar. As noted below, the market price and the NAV of the ETFs may differ. For example, the market price of the SPDR S&P 500 ETF is $ 279.14 as of February 22, 2019, while its NAVPS is recorded at $ 279.18 on Morningstar.

The difference between NAVPS and the market price

For a mutual fund, the NAVPS is the price at which the shares are bought and sold at the end of each trading day. Exchange-traded funds (ETF) and closed-end funds are different in that they trade as stocks throughout the trading day. Since these types of funds are subject to market forces, their NAVPS may deviate from the actual purchase and sale prices of the funds at any time.

NAVPS for ETFs and closed end funds are calculated at the end of the trading day for reporting purposes, but are updated several times per minute in real time throughout the trading day.

Limits on the use of net asset value per share – NAVPS

In the context of the financial statements of listed companies, the NAVPS share value per NAVPS share is generally lower than the market price per share. the historical cost the accounting principle, which tends to underestimate certain asset values, and the forces of supply and demand in the market generally push stock prices above the book value per share.

Learn more about the NAV per share – NAVPS

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