Definition
Net Asset Value represents the per-share value of a fund's or company's assets minus liabilities. Closed-end funds and holding companies often trade at discounts or premiums to NAV due to liquidity, management quality, or market sentiment.
Formula
NAV Premium/Discount = (Market Price - NAV) / NAV × 100%
Example
A closed-end fund has NAV of $20 per share but trades at $17. That's a 15% discount to NAV, potentially offering value if the discount narrows.
FAQ
What is NAV Discount/Premium?
The difference between market price and net asset value per share.
How do you calculate NAV Discount/Premium?
A common formula for NAV Discount/Premium is: NAV Premium/Discount = (Market Price - NAV) / NAV × 100%
Why is NAV Discount/Premium important?
NAV Discount/Premium helps investors evaluate valuation and make more informed decisions.