How are the net asset values ​​of mutual funds valued

What is the value of your fund investment?

There are different views among German investors about the popularity of investment funds. While institutional investors in particular are hardly afraid of contact, some private investors sometimes find this type of investment a little difficult.

This can be related to bad experiences or a lack of knowledge about these financial products. It cannot be due to poor transparency. From this point of view, the net asset value of a fund is particularly important.

The Net Asset Value of a Fund: First Step to Understanding

The net asset value (NAV) is the basis for both the issue and redemption prices of a fund. It is calculated by the respective custodian bank as follows:

current prices for all securities in the fund

+ the total amount of the cash reserve

- the cost of the fund

= Net asset value

The net asset value is then divided by the number of all fund units issued. As a rule, the redemption price of the fund has already been determined. However, caution is advised with any redemption fees that may be incurred.

Even today, the issue surcharge has to be taken into account for many investment funds. The issue price is calculated as follows:

Net asset value

+ Issue surcharge

= Issue price

An example: The net asset value (or redemption price) is € 300, the issue surcharge is 5.0%. This results in an issue price of € 315.

The net asset value - specifics and exceptions

The following applies to 99% of all investment funds: The net asset value is a pure valuation of the fund's assets. Depending on the expectation of the future development of the financial product, there are in rare cases small surcharges or discounts on the value.

In addition, a redemption fee is charged for an equally small number of funds, but this should in any case be viewed critically by potential investors. Because it can by no means be called common.

Some fund companies often charge a so-called performance fee instead of the unusual redemption fee. This, too, should only be accepted by investors if it does not turn out to be disadvantageous with regard to competing products.

For most investment funds, such as equity or bond funds, the net asset value corresponds to the actual market value, which is explained by its daily calculation. There are actually only exceptions to this fact for some real estate funds, as the value of the individual components can often only be estimated.

With closed-end real estate funds, it can happen that the net asset value is well above the actual market value. This is because the market value can only be determined using their value on the so-called secondary market. In the case of closed-end funds, the units cannot be redeemed in any other way before the end of the contract.

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