Net Asset Value (NAV) is most commonly referenced in the context of unit trusts, mutual funds, and closed-end investment funds. For a fund, NAV is calculated daily by subtracting total liabilities from total assets and dividing by the number of units outstanding. This gives investors a fair-value price for their units.
For closed-end investment companies listed on the CSE — such as equity funds, property funds, or diversified holding companies — NAV provides a benchmark against which the market price can be compared. When a fund trades at a "discount to NAV", its market price is below its per-share asset value, sometimes offering a value opportunity for patient investors.
In a property context, NAV is computed by valuing the underlying real estate assets (often independently) and subtracting any borrowings. Real estate investment trusts (REITs) are typically assessed on a NAV basis.
Understanding the difference between market price and NAV is crucial for fund investors on the CSE. Significant persistent discounts may indicate illiquidity, poor management confidence, or structural issues within the fund.