Think of a mutual fund's NAV, which stands for net asset value, as roughly its share price. To understand what it is, know that mutual fund prices don't fluctuate during the day. Because funds are composed of many different securities, fund companies wait until the end of trading each day, when they add up the current market value of all their holdings. They then subtract the fund's expenses for the day, such as commissions paid. The result is divided by the number of shares of the fund that exist -- and that's the NAV.
There's much more to learn about funds in our Mutual Fund Center. If you're looking for a good book on mutual funds, don't pass up John Bogle's Common Sense on Mutual Funds: New Imperatives for the Intelligent Investor.
Let us help you be a better mutual fund investor. You could do a lot of research yourself online, searching for funds with long, strong track records and managers who inspire your confidence and trust. Or you might simply grab a free trial of our Motley Fool Champion Funds newsletter and see which funds analyst Shannon Zimmerman is recommending and has recommended.
Learn much more in these Zimmerman articles: