If you invest in a unit trust in Ghana, the Net Asset Value (NAV) is the single most important number you need to understand. It tells you the price of one unit in the fund—and therefore the value of your investment at any given moment.
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The Simple Definition
NAV stands for Net Asset Value. It is the price of one unit in a unit trust or mutual fund. When you buy units, you pay the NAV. When you sell (redeem) units, you receive the NAV .
Think of it like this: a unit trust is a basket of assets—bonds, stocks, cash, and other investments. The NAV tells you what one slice of that basket is worth.
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The Formula
The NAV is calculated using a simple formula :
NAV = (Total Assets − Total Liabilities) ÷ Total Number of Units Outstanding
If a fund has GHS 10,000,000 in assets, GHS 200,000 in liabilities, and 1,000,000 units, the NAV per unit would be GHS 9.80.
What Counts as Assets and Liabilities
The assets include everything the fund owns: government bonds, corporate bonds, stocks, cash, and any accrued interest or dividends .
The liabilities include management fees, trustee fees, audit fees, and any other expenses owed by the fund .
Under Ghana’s Unit Trusts and Mutual Funds Regulations, 2001 (L.I. 1695), the NAV calculation must account for manager and trustee fees, interest on borrowings, adjustments for securities transactions, accrued income, professional fees, and tax liability .
How NAV Is Calculated in Ghana
Ghanaian fund managers follow strict rules set by the Securities and Exchange Commission (SEC). The SEC’s directive on mark-to-market valuation requires all fund managers to value their portfolios at current market prices, not historical cost .
Prices are sourced from:
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Ghana Stock Exchange (GSE) for listed equities
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Ghana Fixed Income Market (GFIM) for fixed income securities
This means the NAV reflects what the fund’s assets are actually worth today, not what they cost when purchased. Fund managers must publish the NAV daily on their websites .
Why NAV Matters to You
The NAV is the price at which you buy and sell units :
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When you invest: You buy units at the current NAV
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When you withdraw: You redeem units at the NAV on the day your request is processed
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Your investment value: Your units × the current NAV = what your investment is worth
If the NAV goes up, your investment is worth more. If it goes down, your investment is worth less .
A Simple Example
Suppose you buy 100 units at GHS 10.00 each, investing GHS 1,000.
Later, the NAV rises to GHS 11.50. Your investment is now worth GHS 1,150—a 15% return .
If the fund also distributes income (like dividends), that adds to your total return. If you reinvest, you buy more units at the current NAV.
What Affects the NAV?
Several factors can cause the NAV to rise or fall :
| Factor | How It Affects NAV |
|---|---|
| Interest Rate Risk | When interest rates rise, bond prices fall, lowering the fund’s value |
| Foreign Exchange Risk | Investments in foreign assets can lose value when converted back to cedis |
| Managerial Risk | Poor investment decisions by the fund manager can reduce returns |
| Concentration Risk | If the fund is heavily invested in one asset or sector, losses there hurt more |
| Counterparty Risk | If a party the fund deals with defaults, it can affect liquidity and value |
A Common Mistake: Higher NAV Doesn’t Mean Better Fund
Many investors think a fund with a NAV of GHS 50 is better than one with a NAV of GHS 2. This is not true .
What matters is how the NAV changes over time, not its absolute level. A fund with a low NAV that grows steadily is better than a fund with a high NAV that is falling.
NAV and Fund Performance
The change in NAV over time reflects the fund’s performance. However, NAV alone does not tell the complete story. When a fund pays out dividends or capital gains, the NAV drops by the amount distributed—but the investor receives that money.
For this reason, total return is a better measure of performance than NAV alone. Total return includes both the change in NAV and any distributions received .
Quick Facts
| Topic | Details |
|---|---|
| What NAV Means | Net Asset Value—the price of one unit in a fund |
| Formula | (Total Assets − Total Liabilities) ÷ Number of Units |
| When Calculated | At least once every business day |
| Valuation Method in Ghana | Mark-to-market, as directed by SEC |
| Where Prices Come From | GSE for equities, GFIM for fixed income |
| What It Tells You | The price to buy and sell units; the value of your investment |
| Higher NAV = Better? | No. What matters is how NAV changes over time |
Frequently Asked Questions
1. What is NAV in a unit trust?
NAV stands for Net Asset Value. It is the price of one unit in a unit trust. It is calculated by subtracting the fund’s liabilities from its assets and dividing by the total number of units outstanding .
2. How is NAV calculated in Ghana?
In Ghana, NAV is calculated using the mark-to-market valuation method, as directed by the Securities and Exchange Commission (SEC). This means assets are valued at current market prices from the Ghana Stock Exchange and Ghana Fixed Income Market .
3. Why does NAV change every day?
The value of the fund’s assets changes daily as market prices fluctuate. When the fund’s investments increase in value, NAV goes up. When they decrease, NAV goes down .
4. Does a higher NAV mean a better fund?
No. A fund with a NAV of GHS 50 is not necessarily better than one with a NAV of GHS 2. What matters is how the NAV changes over time—the fund’s performance—not its absolute level .
5. How does NAV affect my investment?
Your investment value is your number of units multiplied by the current NAV. When you invest, you buy at NAV. When you withdraw, you redeem at NAV .
6. What is the difference between NAV and market price?
For open-ended unit trusts, NAV is the price at which you buy and sell. For closed-end funds and ETFs that trade on exchanges, market price can differ from NAV—trading at a premium or discount.
7. How often is NAV calculated in Ghana?
Fund managers in Ghana calculate and publish the NAV at least once every business day, typically at the close of trading .
8. What fees are deducted before NAV is calculated?
Management fees, trustee fees, audit fees, and other fund expenses are deducted from the fund’s assets before the NAV is calculated. This means fees reduce the NAV and therefore your returns
Source: Accra Street Journal
Last Updated on September 16, 2026 by Samuel Kwame Boadu
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Samuel Kwame Boadu is a Ghanaian media entrepreneur and storyteller with a passion for amplifying urban voices and uncovering everyday truths. He is the Editor-in-Chief and Founder of Accra Street Journal, a dynamic digital platform dedicated to capturing the pulse of Ghana’s capital—its people, culture, challenges, business, sports and innovations.
