Valuation

Mutual funds are required to determine the price of their shares at least once each business day. The share price—or net asset value (NAV)—is the value of the securities in the fund’s portfolio, minus liabilities, divided by the number of shares outstanding. Some securities are easy to value because market quotations are readily available. For other securities, there may be no readily available market price. In these cases, the fund’s board is required by statute to “fair value” the securities. Boards typically delegate the day-to-day fair-valuation determinations, while receiving periodic reports and overseeing the process.

Below are links to additional resources created, published, and maintained by other organizations. They are merely a sample of additional resources for fund directors. IDC does not control, cannot guarantee, and is not responsible for their accuracy, timeliness, or continued availability. These links are provided solely as a service to fund directors and should not be construed as indicating in any way that IDC endorses either the content provided or the third-party providers of any such content.

Deloitte: Fair Valuation Pricing Survey (2020)

Securities and Exchange Commission: Select Bibliography on Funds' Valuation of Portfolio Securities

IDC’s memos inform directors about important regulatory, legislative, and judicial developments. IDC also comments on proposals that could affect board responsibilities or shareholder interests. See below for recent comment letters and memos on selected topics.