What it is
The net asset value represents how much an entity is worth. Seen in the context of pooled funds, it is calculated as the total value of the fund’s assets minus the total value of the fund’s liabilities on a certain date.
When you invest in a Unit Investment Trust Fund (UITF), you buy units of participation. How many units you get depends on how much money you put in, and how much each unit is worth (which is the Net Asset Value Per Unit, or NAVPU).
For mutual funds, the same is true but instead of units, the term “shares” is used instead. So, you’ll have the NAVPS, or Net Asset Value Per Share.
What it means for you
A fund’s net asset value can go up or down according to how much its assets are currently worth, which is why the fund manager will try to make transactions that will grow the overall value.
If this happens, the NAVPU or NAVPS will increase, and so will the value of your investment. Of course, the opposite could happen and your investment could be worth less if the net asset value and NAVPU or NAVPU decreases.
To see how the fund is doing and to check the NAVPU or NAVPS, take a look at its Key Information and Investment Disclosure Statement (KIIDS).
