What is the net asset value of an investment fund

It is one of the most important pieces of information when it comes to deciding on an investment fund in which to invest our savings

When we talk about investment funds we use certain terminology that can sound complex or confusing. However, being clear about certain concepts will help us when choosing the best investment fund or the one that best suits our needs. We are going to look at what the net asset value of an investment fund is.

When a person decides to invest in an investment fund, what they are really doing is buying shares in that fund, in other words, they are acquiring ‘part’ of the total assets of the fund. These shares have a specific price known as the net asset value and their evolution determines the profitability of an investment fund.

The net asset value of an investment fund is calculated by dividing the assets of the fund by the number of existing shares, although the investor does not need to make this calculation, as a fund manager publishes the net asset value of all its funds daily .

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Why do you want to know the net asset value?

The net asset value is the price at which the investor buys the shares in their chosen investment fund. Moreover, as we remarked earlier, the net asset value is a useful reference for determining the profitability of the investment and therefore the return that may be received if the investor decides to sell their shares and liquidate their investment.

In general terms, the depositor will pay the reimbursement within a maximum of three business days, although in some cases this period could be extended to five business days.

In this respect, the investment fund works in a similar way to any other buying and selling process. In simple terms, if the investor sells their shares at a price higher than that at which they bought them, they have made a profit on the investment; if the opposite is true, then the investor will not have recouped all the money they invested and will be faced with a loss.
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Unlike other assets, such as real estate, works of art and shares in companies not quoted on the market, investment funds have a high level of liquidity. Moreover, the fund manager publishes the net asset value of the investment fund shares daily .
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