What is Net Asset Value (NAV)?

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We’re excited about the launch of the Yieldstreet Prism Fund, the first product in an entirely new fund category for Yieldstreet. With the Yieldstreet Prism Fund comes a few logistical changes that you may not be familiar with from previous offerings. Unlike typical Yieldstreet offerings, when investing in the Yieldstreet Prism Fund, you’re purchasing shares in what is known as a closed-end fund (CEF).   

For the Yieldstreet Prism Fund, we’ll be using what is known as Net Asset Value (NAV) to calculate the per-share value of the Fund. Let’s take a closer look at NAV, how it is used, and how it will relate to the Yieldstreet Prism Fund.

How is NAV determined?

NAV is determined by dividing the difference between a fund’s total assets and liabilities by the number of existing shares. Liabilities in the case of the Yieldstreet Prism Fund could consist of the fund borrowing on its own behalf or borrowing against an individual asset or a portfolio of assets.

As a formula, NAV is represented as: 

NAV = (Assets – Liabilities) / Total number of outstanding shares

For the Yieldstreet Prism Fund, the NAV will be determined on at least a quarterly basis, as well as when the Fund is reopened to raise additional capital.1

What’s the difference between a share price and a NAV?

A share price is what people buy and sell shares for on an open market. For example, when you purchase stock in a company, the share price of a stock may rise and fall continuously throughout the day. The NAV price of a fund, however, is the per-share value of a fund’s net assets (minus its liabilities) and is not continuously recalculated throughout the day. 

As stated previously, for the Yieldstreet Prism Fund, the NAV will be determined on at least a quarterly basis.

Why will the NAV of the Yieldstreet Prism Fund matter going forward?

NAV is essentially the value at which investors can buy or sell shares of the Fund. For the Yieldstreet Prism Fund, shares won’t be traded on an open market, therefore the NAV will be calculated as the fair value for the Yieldstreet Prism Fund, allowing investors to purchase or sell shares from the Fund at the determined NAV price. Because the NAV will include accrued interest, the timing of distribution payments has the potential to affect the NAV. 

To familiarize yourself with the details of the Yieldstreet Prism Fund, it is important that you review the prospectus, available for download on this page. Still have additional questions regarding the Yieldstreet Prism Fund? Read our post on What to Expect From the Yieldstreet Prism Fund or email the Yieldstreet Team at [email protected].

A discussion of the Fund’s expected expenses and dividend yield has recently been updated on the Fund’s website, www.yieldstreetprismfund.com, and should be reviewed carefully, along with the investment objectives, risks, charges, and expenses of the Fund contained in its prospectus, before investing.

Investors should carefully consider the investment objectives, risks, charges and expenses of the YieldStreet Prism Fund before investing. The prospectus for the YieldStreet Prism Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to www.yieldstreetprismfund.com. The prospectus should be read carefully before investing in the Fund.

Investments in the Fund are not bank deposits (and thus not insured by the FDIC or by any other federal governmental agency) and are not guaranteed by Yieldstreet or any other party.

The securities described in the prospectus are not offered for sale in the states of Nebraska, North Dakota or to persons resident or located in such states at this time. No subscription for the sale of shares will be accepted from any person resident or located in Nebraska, North Dakota at this time.

1We expect to determine the net asset value per share of the Fund’s common stock by dividing the value of its investments, cash and other assets (including interest accrued but not collected) minus all liabilities (including accrued expenses, borrowings and interest payables) by the total number of shares of the Fund’s common stock outstanding on a quarterly basis. The most significant estimate inherent in the preparation of our financial statements likely will be the valuation of investments and the related amounts of unrealized appreciation and depreciation of investments recorded. There generally is no single method for determining fair value in good faith. As a result, determining fair value usually requires that judgment be applied to the specific facts and circumstances of each investment while employing a consistently applied valuation process for the types of investments the Fund makes. We will be required to specifically determine the fair value of each individual investment on a quarterly basis.
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1 Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

2 Represents a net estimated, unrealized annualized internal rate of return (IRR) of your portfolio and is based by reference to the effective distribution dates and amounts to and from the investments, as well as any outstanding principal and accrued and unpaid interest as of the current date, after deduction of management fees and all other expenses charged to the investments.[read more]

3 "Annual interest" represents an annual target rate of interest and "term" represents the estimated term of the investment. Such target returns and estimated term are projections of the returns or term and may ultimately not be achieved. Actual returns and term may be materially different from such projections. These targeted returns and estimated term are based on the underlying agreement between the SPV and borrower or originator, as applicable.

4 Reflects the initial quarterly distribution declared by the board of directors on February 6, 2020, which will be payable to stockholders of record as of June 10, 2020, and the initial offering price of $10 per share.

5 The Fund will cease investing and seek to liquidate the Fund's remaining portfolio no later than 48 months after the Fund's initial closing. It may take up to twelve months thereafter to fully monetize any remaining illiquid investments in the Fund's portfolio.

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