Comprehensive Institutional Breakdown
Mutual funds calculate NAV once daily after market close (4:00 PM EST). Unlike mutual funds, Exchange-Traded Funds (ETFs) trade continuously on secondary exchanges throughout the day, where market price can fluctuate at a slight premium or discount to intraday NAV based on authorized participant creation/redemption arbitrage.
Algorithmic Formula / Notation
NAV = (Total Market Value of Fund Holdings - Total Fund Liabilities) รท Total Outstanding Shares
Institutional Scenario Example
A mutual fund with $1.2B in securities and $200M in liabilities with 50M shares outstanding has an NAV of $20.00 per share.
Cross-Market & Execution Note
In crypto trusts (e.g., GBTC prior to ETF conversion), shares traded at steep 40%+ discounts to NAV due to structural lockups.