When Do Mutual Funds Update Their Prices?

Mutual funds allow many investors to pool their money to purchase a diversified portfolio of stocks, bonds, or other securities. Unlike individual stocks, which trade throughout the day with constantly fluctuating prices, mutual funds are generally priced only once per business day. This distinct pricing mechanism means that the value of your investment, whether you are buying or selling shares, is determined at a specific time each day.

Understanding Mutual Fund Valuation

The valuation of a mutual fund centers on its Net Asset Value, or NAV. The NAV represents the per-share value of a mutual fund. It is the price at which investors can buy or sell shares directly from the fund company. The calculation of NAV involves taking the total market value of all the securities and cash held by the fund, subtracting any liabilities, and then dividing that resulting figure by the total number of outstanding shares. For instance, if a fund holds $100 million in investments and has $10 million in liabilities with one million shares outstanding, its NAV per share would be $90.

The Daily Update Cycle

Mutual funds typically update their NAV once per day, after the major U.S. stock exchanges conclude their trading session, which is usually at 4:00 PM Eastern Time. The fund’s accounting agent gathers the closing prices for all the individual securities held within the fund’s portfolio. They then calculate the total value of these assets, deduct any accrued liabilities, such as operational expenses or fees owed, and finally divide that net amount by the number of shares currently held by investors. While this calculation starts right after market close, the comprehensive process takes time. Consequently, the newly calculated NAV is generally not published immediately, often becoming available later in the evening or by the next morning.

Order Placement and Pricing

The daily update cycle directly impacts how investor orders are processed, governed by the “forward pricing rule.” This rule mandates that all mutual fund buy or sell orders are processed at the next calculated NAV, rather than at the NAV that was in effect when the order was placed. This means investors do not know the exact price they will pay or receive when they place their order. For orders submitted before the fund’s daily cut-off time, which typically aligns with the 4:00 PM ET market close, those transactions will receive that same day’s calculated NAV. Conversely, if an order is placed after this cut-off time, it will be processed using the NAV calculated at the end of the next business day. This system ensures fairness and prevents investors from trading on stale prices.

Finding Current Mutual Fund Prices

Once the daily NAV calculation is complete and published, investors can access this updated pricing information through several reliable sources. The most direct way is by visiting the official website of the specific fund company. Additionally, brokerage account platforms where you hold your investments typically display the updated NAVs for the funds in your portfolio. Financial news websites also widely report mutual fund prices. These platforms generally show the previous business day’s closing NAV until the new NAV is calculated and released for the current day’s trading.