Net Asset Value and Cross Pricing

What is Net Asset Value (NAV)?

The Net Asset Value (NAV) of a mutual fund is its per-share price. It's calculated by subtracting the fund's debts from its total assets and dividing that by the number of shares outstanding. The NAV is computed daily, thereby indicating the current value of each share. It considers the fund's income, expenses, and changes in the value of its investments.

How does cross pricing affect settlement price?

At times, the settlement price of a fund might be marginally higher or lower than the final daily NAV of the fund due to cross pricing. Cross pricing helps make sure that when some investors buy or sell units of the fund, the costs don't affect existing investors.

The settlement price of the fund is adjusted to capture the cost that is incurred as a result of any redemptions or subscriptions. This way, those trading costs are covered by the investors trading the fund and not spread across all investors.

Funds Affected by Cross Pricing

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