How to Price a Mutual Fund
If you need to calculate the the price of a mutual fund, the process can take a bit of research, but once you have the information, it's just a matter of making a few calculations. This article will explain the process by which a mutual fund is priced.
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Things You'll Need
- Current holdings of fund
- Number of shares outstanding
- Calculator
- Fund asset prices
Instructions
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1
Before identifying the per share price of a mutual fund, you must know what positions the mutual fund holds. This can be stocks, bonds, options, warrants, real estate and money market funds. Just about anything that qualifies as an investment product.
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2
You now need to know what the current market price of each security held by the fund. This can include accrued interest, dividends, rents and royalties. Once an accurate price for each security is obtained, you will need to value the fund position. To do this, multiply the number of each holdings times that security's price. This will give each position's value. From here, accrued interest would be added to reflect a more accurate value. You will use the sum of the position values to find the net asset value for the fund.
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3
Next, determine the total number of shares outstanding for the mutual fund. This figure is the number of shares people own.
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Take the total value of the positions from Step 2 and divide that number by the total number of shares outstanding from Step 3. This will give you the net asset value per share for the mutual fund. It is necessary to process this daily to account for purchases and liquidations for the funds investors.
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