Financial Markets Book Financial Markets For The Rest Of Us
An Easy Guide To Money, Bonds, Futures, Stocks, Options, And Mutual Funds
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by Robert Hashemian

Page 340

NAV. So in order to calculate a fund's net assets, you would simply use the following formula:

Number of Shares X NAV = Fund's Net Assets

Mutual funds have other similarities to stocks. A mutual fund's net assets are somewhat similar to a company's market cap, which can be arrived at by multiplying its number of outstanding shares by its per share price.

Just like stocks, mutual funds also have symbols. For example, the Vanguard Equity Income Fund has the symbol VEIPX, and T. Rowe Price Small-Cap Stock Fund has the symbol OTCFX. And just like stocks you can get daily price information (usually updated once a day, however) and 52-week high and low prices. But don't be fooled by the similarities between stocks and mutual funds. As you will discover they are a lot more different than similar. For one, with most mutual funds you can actually have partial shares. For example if VEIPX's NAV is $28, you can still invest an entire $1,000 in this fund which would get you 38.4615 shares. Try doing that with a stock.

Not all funds are expressed in terms of NAV. Money market funds (which your uninvested cash in your brokerage account is probably automatically invested in) are usually expressed in terms of yields. This is not unlike putting your money in a savings account or a CD. In this case your number of shares and the NAV are irrelevant. What's relevant is the amount of money invested and the fund's yield, which is basically interest on your money. Closed-end funds (covered shortly) are mostly expressed in terms of share price rather than NAV.


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    Bonds Futures Stocks Options
    Mutual Funds Retirement Final Words Appendix A

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