Net asset value

Some quotes from the web
From investopedia : A mutual fund's price per share or exchange-traded fund's (ETF) per-share value. In both cases, the per-share dollar amount of the fund is derived by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding.

In the context of mutual funds, NAV per share is computed once a day based on the closing market prices of the securities in the fund's portfolio. All mutual fund’s buy and sell orders are processed at the NAV of the trade date. However, investors must wait until the following day to get the trade price.

Mutual funds pay out virtually all of their income and capital gains. As a result, changes in NAV are not the best gauge of mutual fund performance, which is best measured by annual total return.

Because ETFs and closed-end funds trade like stocks, their shares trade at market value, which can be a dollar value above (trading at a premium) or below (trading at a discount) NAV.

From the Bogleheads' forum: In general, the value of the fund measured by NAV (Net Asset Value) is the total value of all the assets in the fund at any time. This number increases and decreases as the market value of the assets held increases and decreases and is also increased by the accumulation of any dividends and interest paid to the fund from the assets held in the fund. At the same time, the value is decreased by expenses incurred to operate the fund which include management expenses (listed as the Expense Ratio) and trading costs paid to brokers by the fund as the fund buys and sells securities. The value of the fund is also reduced by any payouts the fund makes to fund holders, meaning periodic dividends as well as capital gain distributions. Some bond funds at some fund companies do not accrue bond interest payments in the NAV and do not reduce the NAV when paid out, so that can be a complication.

Bond funds versus equity funds
Most Vanguard bond funds accrue interest to the share holders daily. Here is a typical statement from a prospectus: "Each Fund distributes to shareholders virtually all of its net income (interest less expenses) as well as any net capital gains realized from the sale of its holdings. The Fund’s income dividends accrue daily and are distributed monthly." The term accrue used in this sense means that the income dividends are credited to your account each day, just like interest in a savings account that accrues daily. Since the money set aside for your dividends is both an asset of the fund and a liability, it does not affect the calculated net asset value. When the fund distributes the income dividends at the end of the month, the net asset value does not change as both the assets and liabilities decrease by exactly the same amount. [Note that if you sell all of your bond fund shares in the middle of the month, you will receive as proceeds the value of your shares (calculated as number of shares times net asset value) plus a separate distribution of the accrued income dividends.]

In most equity funds and balanced funds, dividends do not accrue to you; and you only become entitled to them if you hold the fund on the distribution date. Therefore, accumulated dividends are not liabilities of the fund; as dividends come into the fund, the net asset value increases. Only when the dividends are paid out does the net asset value decrease by the dividend amount.