Net Asset Value (NAV)
Abbreviation: NAV
Plain-English definition
Net asset value is the value of a fund's assets minus its liabilities. NAV per share divides that amount by the applicable shares outstanding.
Why it matters
A publicly traded BDC can trade above or below NAV. Because many BDC investments are private and do not trade continuously, their fair values require judgment and can differ from the amounts ultimately realized.
Example
If a BDC reports NAV of $20 per share while its shares trade at $18, the market price is 10% below reported NAV. The discount is a price relationship, not proof that the shares are undervalued or protected from loss.
How income investors use it
Track NAV per share over several reporting periods and reconcile significant changes with unrealized marks, realized gains or losses, distributions, share issuance, repurchases, and other disclosed activity.
Fly High perspective
NAV and asset quality may inform individual-company analysis, but Fly High keeps the company-specific earnings measure as the primary monitoring signal for dividend support. NAV is not a substitute coverage formula or a guarantee of recoverable value.
This material is general education, not individualized investment, tax, or legal advice.