CISA NAV Calculations: Worked Examples and Common Mistakes

Table of Contents

• • 1. Separate total NAV from NAV per unit
• • 2. NAV worked example: include assets and liabilities once
• • 3. NAV worked example: move between cash and units
• • 4. Keep charges and dilution measures separate
• • 5. Match the order to the correct valuation cycle
• • 6. Check the result before choosing an answer

The CISI CISA NAV calculation starts with a short formula, but the answer depends on identifying the right figures. A question may ask for the whole fund’s net assets, a price per unit, the number of units purchased, or the investor’s total payment. Those are different results.

This guide uses original, simplified examples for revision. They are not copied from an official sample paper or a live exam. Unless stated otherwise, each example assumes one class, one currency and no charges or dealing adjustments. The wider CISA study guide explains where pricing fits into your preparation.

1. Separate total NAV from NAV per unit

Total NAV = total assets − total liabilities.

Basic NAV per unit/share = relevant net assets ÷ matching units/shares in issue.

The first result is a money amount for the fund or class. The second is a money amount for one unit or share. Dividing again when you already have a per-unit price is just as misleading as forgetting to divide at all.

Under FCA COLL 6.3, valuation and pricing follow the fund’s governing documents and prospectus. Where classes differ, use figures attributable to the relevant class. Do not divide one class’s net assets by the whole fund’s unit count.

2. NAV worked example: include assets and liabilities once

A single-class fund has these balances at the same valuation point:

Item	Amount
Investments	£12,400,000
Cash	£350,000
Receivables	£50,000
Total liabilities, including accrued expenses	£300,000
Units in issue	10,000,000

First add the assets: £12,400,000 + £350,000 + £50,000 = £12,800,000. Cash and receivables count in this example; the investment portfolio alone is not the entire asset total.

Next deduct liabilities: £12,800,000 − £300,000 = £12,500,000 total NAV.

Finally divide: £12,500,000 ÷ 10,000,000 = £1.25 per unit, or 125p.

Notice that both numerator and denominator can be expressed in millions: 12.5 ÷ 10 still gives 1.25. You must use the same scale on both sides. Dividing £12.5 million by the number 10 would produce a completely different result.

If an expense is already included in the £300,000 liabilities, leave it there. If the question states that a further accrued fee is excluded, include that extra liability once. Payment date alone does not decide whether an expense belongs in the calculation.

3. NAV worked example: move between cash and units

Consider a separate single-class fund with £4.1 million assets, £100,000 liabilities and 8 million units. Total NAV is £4 million, so the basic price is £0.50, or 50p.

An investor placing £2,500 into that fund, with no charges or adjustments, receives:

£2,500 ÷ £0.50 = 5,000 units.

A holder redeeming 3,000 units on the same assumptions receives:

3,000 × £0.50 = £1,500.

Write down the requested result before choosing an operation. Cash divided by price gives units; units multiplied by price gives cash. A quick reverse check catches many slips: 5,000 × £0.50 returns the original £2,500.

The questions below let you practise that sequence and distinguish the price calculation from later charges. The full CISA course covers the wider administration syllabus.

4. Keep charges and dilution measures separate

Suppose an investor purchases 100 units at a £1.25 base price. The scenario specifies a 2% initial charge added to the base transaction value. Units cost £125; the charge is £2.50; the investor pays £127.50. The stated percentage basis matters. A question defining a charge differently needs a different calculation.

A dilution levy and a dilution adjustment also do different jobs. The levy is separate from the price; the adjustment changes the price. Follow the stated policy rather than applying both automatically.

For example, a specified upward adjustment of 0.4% changes £1.25 to £1.255. Buying 100 units at that adjusted price costs £125.50 before any other stated charge. In an alternative levy example, the price could remain £1.25 with a separate £0.50 charge on the transaction. The equal cash outcome in these invented examples does not make the two mechanisms interchangeable.

5. Match the order to the correct valuation cycle

FCA COLL 6.3.9 generally requires forward pricing, with a specified money-market-fund exception. Apply the fund’s dealing terms as well as the pricing rule.

Imagine eligible orders close at noon for a 4 p.m. valuation. Under the stated terms, a complete 11:55 a.m. order enters that cycle. A 12:05 p.m. order enters the next dealing cycle. The fact that 4 p.m. has not arrived does not undo the missed cut-off.

If a question supplies yesterday’s published NAV, ask why it is there. It might be background information rather than the execution price. For the legal-form distinction behind these examples, see UCITS versus OEICs.

6. Check the result before choosing an answer

Use a short review sequence:

1. Label the target: total NAV, price per unit, units purchased or cash payable.
2. Match the inputs: same valuation point, class, currency and scale.
3. Deduct liabilities once: check whether accrued expenses are already included.
4. Apply the denominator: use the matching units or shares in issue.
5. Apply the stated terms: charges, dilution policy, cut-off and rounding instructions.

Keep working precision until the final step. The FCA price rule requires at least four significant figures; that is different from four decimal places. For illustration, £0.562345 to four significant figures becomes £0.5623. Follow any more specific instruction in the question.

Use the current official syllabus to keep numerical practice in proportion to the rest of your revision. A correct calculation is useful evidence of understanding when you can also explain what the result represents and why each input belongs there.