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What Your Fund's NAV Isn't Telling You

Don't focus on NAV when measuring a fund's performance or gauging its attractiveness Many investors think that Fund A . ....

Karen Wallace 14 December, 2006 | 0:00
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Don't focus on NAV when measuring a fund's performance or gauging its attractiveness. Many investors think that Fund A is a better deal than Fund B because the former's net asset value is lower, however, it's wrong. These kinds of flawed perceptions are stemming from mixing mutual fund's net asset value with a company's stock price, which have some crucial differences between them. Morningstar US Research Team has provided some ideas of what NAV exactly is, and better ways to evaluate mutual funds performance qualitatively.

How Is NAV Like a Stock Price?
There are similarities between a mutual fund's net asset value and a stock's share price, as each represents the price of one share of an in

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About Author

Karen Wallace  Karen Wallace, CFP® is Morningstar’s director of investor education.

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