What does fund valuation mean?

Fund valuation means that the fund company evaluates the assets of the fund to determine the net value of the fund.

The net value of the fund refers to the balance of the total assets of the fund MINUS the liabilities of the fund. The assets of the fund include stocks, bonds and cash.

There are many methods of fund valuation, and the specific method depends on the type and nature of assets held by the fund. For example, if the fund holds stocks, the valuation of the fund can be calculated through the market price of the stocks; If the fund holds bonds, the valuation of the fund can be calculated by the market price of the bonds. For some illiquid assets, such as real estate and collectibles, fund valuation can be estimated by other methods.

Fund valuation is an important basis for fund management, and it is also the basis for fund investors to calculate income. The net value of the fund changes with the market value of the assets held by the fund, so the net value of the fund may also fluctuate. The higher the net value of the fund, the higher the asset value of the fund, and vice versa.