Net Asset Value Per Share (NAVPS)

Net asset value per share (NAVPS), also called book value per share, measures the value of a fund or company on a per-share basis. It represents the portion of the fund’s net assets attributable to each outstanding share.

Formula

NAV = Assets − Liabilities
NAVPS = NAV ÷ Shares outstanding

• Assets typically include the market value of investments, cash and cash equivalents, receivables, and accrued income.
• Liabilities include short- and long-term obligations and accrued expenses (management fees, operating costs, etc.).

Example

A mutual fund has:
– Investments: $500,000,000
– Cash: $15,000,000
– Receivables: $1,500,000
– Accrued income: $250,000
Total assets = $516,750,000

Liabilities:
– Short-term liabilities: $20,000,000
– Long-term liabilities: $5,000,000
– Accrued expenses: $50,000
Total liabilities = $25,050,000

NAV = $516,750,000 − $25,050,000 = $491,700,000
Shares outstanding = 7,500,000
NAVPS = $491,700,000 ÷ 7,500,000 = $65.56

NAVPS vs. Market Price

• Open-end mutual funds: shares are bought and redeemed at NAVPS, which is determined once per trading day (see next section).
• Closed-end funds and ETFs: trade on exchanges throughout the day. Market prices can differ from NAVPS and may trade at a premium or discount due to supply/demand and market sentiment.
• NAVPS reflects the underlying value per share; market price reflects investor demand and may move independently.

Why NAVPS Matters

• Redemption price: For registered open-end funds, NAVPS is the price at which investors buy or redeem shares.
• Valuation snapshot: NAVPS summarizes a fund’s assets and liabilities on a per-share basis.
• Transparency: The NAV calculation includes holdings and cash items, helping investors understand what they own.
• Limitations:
• NAVPS is not a performance measure.
• For corporations, book value per share (similar to NAVPS) can understate market value because of historical-cost accounting and intact market expectations, so market price often exceeds book value.

What NAVPS Means for Investors

• NAVPS is simply the dollar value per share, not an indicator of expected return.
• Two funds with different NAVPS values aren’t directly comparable by price alone; an investor’s allocation depends on total units purchased, not the per-share NAV.
• Investors should consider NAVPS alongside holdings, fees, performance history, and investment objectives.

Open-Ended vs. Closed-End Funds (Quick Comparison)

• Open-ended funds:
• No fixed number of shares.
• Shares are issued or redeemed by the fund company.
• Priced at NAVPS (once daily).
• Closed-end funds:
• Fixed number of shares issued via IPO.
• Shares trade on exchanges and may trade above/below NAVPS.

When NAVPS Is Declared

Mutual funds calculate NAVPS after the U.S. market close (commonly using 4:00 p.m. Eastern Time) and typically publish the updated NAV later that day. There is no single universal filing deadline; practices vary by fund.

Bottom Line

NAVPS provides a straightforward per-share valuation of a fund’s net assets and determines the redemption price for open-end funds. It’s a useful reference for understanding the underlying value of holdings, but it is not a standalone indicator of performance, and market prices for exchange-traded funds and closed-end funds can diverge from NAVPS.