About the asset net worth of a unit Fund

What is the asset net worth of a unit fund? How are the number and redemption amount of the subscribed fund units calculated based on the unit's net asset value?

 

The net asset value of a fund refers to the balance after the total market value of the Fund assets calculated at the fair price is deducted from the debt at the time of a fund valuation. The balance is the equity of the Fund Holder. The process of calculating fund assets at fair prices is the valuation of the Fund.

The net asset value of an organization's fund, that is, the net asset value of each fund unit. The formula for calculating the asset net worth of an Enterprise Fund is as follows:

Asset net worth of the unit Fund = (total assets-total liabilities)/total number of fund units

Total assets are the total assets (including stocks, bonds, bank deposits, and other marketable securities) owned by the Fund at a fair price. Total liabilities refer to the liabilities formed during the operation and financing of the Fund, including various expenses payable to others and fund interest payable. The total number of fund units refers to the total number of fund units that were issued at that time.

Fund valuation is the key to calculating the Unit's asset net worth. Funds often invest in various investment tools in the securities market, such as stocks and bonds. As the market prices of these assets are constantly changing, only by recalculating the asset net worth of a unit fund on a daily basis can the Fund's investment value be promptly reflected. The valuation principles of fund assets are as follows:

1. listed stocks and bonds are calculated based on the market price on the calculation day. If no transaction is made on the current day, they are calculated based on the market price on the latest trading day.

2. Unlisted shares are calculated at their cost price.

3. For unlisted government bonds and non-expiring fixed-time deposits, the accrued interest amount shall be calculated based on the principal plus the value to the valuation date.

4. In case of special circumstances, the fund manager shall handle the determination of the asset value in accordance with the relevant provisions of the State.

The transaction price of a closed-end fund is the market price that is known when a trading behavior occurs, the transaction price of an open-end fund's fund unit depends on the net asset value of the unit that has not been determined by the Purchase and redemption behaviors (but can be calculated and announced on the next trading day after the day is closed.

The number of subscribed fund units and the redemption amount are calculated as follows:

1. subscription price = fund unit nominal value + subscription fee

2. Purchase Price = net asset per unit × (1 + purchase rate)

Number of purchase units = purchase amount/purchase price

3. Redemption Price = net asset of the unit × (1-Redemption rate );

Redemption amount = number of redemption units x Redemption Price

For example, if an investor has 1 million yuan to subscribe to an open-ended fund, assuming that the purchase rate is 2%, the net worth of the unit fund is 1.5 yuan.

Purchase Price = 1.5 RMB × (1 + 2%) = 1.53 RMB

Number of purchase units = 1 million/1.53 = 0.65333 million base fund units (non-integer shares take an integer)

Similarly, if an investor wants to redeem 1 million fund units, assuming that the redemption rate is 1%, and the net asset value of the unit is 1.5 yuan, then

Redemption Price = 1.5 RMB × (1-1%) = 1.485 RMB

Redemption amount = 1 million × 1.485 = 1.485 million RMB