Explaining Mutual Fund's Net Asset Value (NAV)

Imagine a mutual fund as a big pot of money from lots of people.

The NAV is the price you pay for a slice of that pot.

To find the price, you add up everything the fund owns, like stocks and bonds, and any money it has.

Then, you subtract what the fund owes, like fees.

Finally, you divide by the number of slices (units) of the fund.

If the NAV goes up, it means the fund's investments are doing well.

Investors look at the NAV, how well the fund has done in the past, how much it costs to run, and how consistent it is before they decide to invest.