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.

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.

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.

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.

References

- U.S. Securities and Exchange Commission: Net Asset Value
- 20 Something Finance; How is a Mutual Funds Share Price Determined; G.E. Miller; May 13, 2008
- Apple. "Apple Expands Capital Return Program to Over $130 Billion." Accessed July 30, 2020.
- New York Times. "Flush With Cash, Apple Plans Buyback and Dividend." Accessed July 30, 2020.

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