Market Price of Mutual Funds
The market price of a mutual fund is determined by the fund’s net asset value (NAV). Net asset value is the book value of a fund and is calculated by determining the fair market value of the securities in the fund and subtracting the fund’s expenses (liabilities). The book value is then divided by the number of shares in the fund to yield the net asset value per share.
An open-end fund’s net asset value is computed once each business day, typically at the close of the market (4:00 p.m. ET), and reported to both FINRA and the financial media. Market price is determined on a forward basis. This means that shares are bought and redeemed a