NAV and iNAV

Modified on Thu, 20 Jun 2024 at 11:28 AM


What is iNAV and how is it calculated?


The indicative or intraday Net Asset Value (iNAV) is calculated by taking the last traded price of all the assets in the ETF basket, multiplying it by the sum of the number of shares in the ETF creation basket and the cash component (money not invested in the ETF), and then dividing this total by the total number of ETF shares in the creation basket. This calculation provides a real-time reference point for investors to assess the fair value of the ETF compared to its market price on the stock exchanges.

iNAV =

total ETF shares in the creation basket
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last traded price of all the securities in the ETF basket × (number of shares in the ETF creation basket+cash component)

What is the difference between NAV and iNAV?


Net Asset Value (NAV)

Intraday Net Asset Value (iNAV)

Definition

Market value of one unit of a mutual fund or ETF's shares.

Estimate of the net asset value throughout the trading day.

Calculation

Calculated at the end of each trading day based on the closing market prices of the fund's underlying securities.

Calculated continuously throughout the trading day based on the current market prices of the ETF's underlying securities, providing real-time information. 

Use

Crucial for determining the price at which investors buy or redeem units of a mutual fund or ETF.

Used to gauge the fair market value of the ETF's shares during the trading day, helping investors make informed decisions about buying or selling.



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