The value of one share in an investment company. Investors buy shares in investment companies, with each share entitling its holder to a proportional ownership in net assets. Net asset value (NAV) equals assets minus liabilities divided by the number of shares outstanding:

Net asset value = market value of assets minus liabilities/ shares outstanding

This value reflects the value of pooled assets after dividing claims to those assets among all investors (owners of shares). For instance, an investment company manages a $100 million portfolio. If the company owes $10 million (in the form of fees, wages, managers’ compensation, etc), and has $5 million shares outstanding, then:

Net asset value = ($100 million – $10 million)/ 5 million shares = $18 per share

The net asst value (NAV) represents the dollar value of one share of an investment company (such as a mutual fund). This is the price investors receive when selling their shares in the company.