How to Calculate Weighted Average Net Assets

by Charlotte Johnson ; Updated April 19, 2017
The net asset value of a fund is also referred to as the book value.

The net asset value (NAV) of a mutual fund is a method of tracking price changes in the fund. This value is calculated daily since the closing value of funds fluctuate on a regular basis. The net asset calculation is based on the value of a fund minus the liabilities associated with it. This amount is then divided by the weighted average of shares outstanding. Since the amount of issued shares of a fund change over the course of time, the weighted average takes into the account the length of time that a certain number of shares were outstanding.

Step 1

Calculate the weighted average of shares outstanding. Examine how many shares are outstanding over the course of a year. Multiply the amount of shares times the percentage of the year in which they were outstanding. For example, assume that a company has 1 million shares outstanding for half of the year and 2 million shares outstanding for the other half of the year. A half of a year is 50 percent, which translates to 0.50 as a decimal. Multiply 1 million times 0.50 to get 500,000 and 2 million times 0.50 to get 1 million. Add 500,000 and 1 million to get 1.5 million. Divide by two, as there are two values that you are averaging, to get a weighted average of 750,000 shares outstanding.

Step 2

Subtract liabilities associated with a fund from its total assets. For example, consider a fund that has $100 million in total assets and $12 million in liabilities. Subtract $12 million from $100 million to get $88 million. This is the fund's net assets.

Step 3

Divide the net assets by the weighted average of shares outstanding to determine the average net assets. Continuing with the example from the previous steps, divide $88 million by 750,000 to get an average net asset or book value of $117.33.

About the Author

Charlotte Johnson is a musician, teacher and writer with a master's degree in education. She has contributed to a variety of websites, specializing in health, education, the arts, home and garden, animals and parenting.

Photo Credits

  • Thinkstock/Comstock/Getty Images