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NAV

NAV per share is the value of a mutual fund share at any point in time. It is the price of a mutual fund share, exclusive of any sales charge or redemption charge that might be assessed by the company at time of purchase or sale.[4]

[4] The calculation of an actual NAV for Fidelity's Equity-Income Fund is explained later in this chapter.

To buy a mutual fund, an investor pays the current NAV plus any sales charge (explained later). When selling the shares back to the mutual fund company, the investor receives the current NAV less any redemption charges, which are relatively uncommon.[5]

[5] Under the Investment Company Act of 1940, forward pricing must be used for purchases and sales. This means that an investor who is either buying shares from the company or selling them back does so at the next computed share price following the receipt by the mutual fund of the order to buy or sell.


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