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What is Net Asset Value (NAV)?

February 18, 2020 • 5 min read

The Yieldstreet Alternative Income Fund allows investors to have exposure to numerous alternative asset classes with just a single investment allocation. The Fund is also the first Yieldstreet investment product that is available to all investors (regardless of net worth or accreditation status). But, unlike Yieldstreet’s single asset class offerings, when investing in the Fund, you’re purchasing shares in what is known as a Closed-End Fund (CEF). In order to calculate the per-share value of the Fund, we’ll be using what is known as Net Asset Value (NAV). Let’s take a closer look at NAV, how it is used, and how it will relate to the Yieldstreet Alternative Income Fund.

How is NAV determined?

NAV is determined by dividing the difference between a fund’s total assets and liabilities by the number of outstanding shares.

As a formula, NAV is represented as:

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

For the Yieldstreet Alternative Income Fund, the NAV will be determined on at least a quarterly basis, as well as when the Fund is reopened for shareholder subscriptions.

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 assets (minus its liabilities) and is not continuously recalculated throughout the day. As we mentioned above, the NAV for the Yieldstreet Alternative Income Fund will be determined on at least a quarterly basis.

Why will the NAV of the Yieldstreet Alternative Income Fund matter going forward?

NAV is essentially the value at which investors can buy shares of the Fund. For the Yieldstreet Alternative Income Fund, shares won’t be traded on an open market, therefore the NAV will be calculated as the fair value for the Yieldstreet Alternative Income Fund, allowing investors to purchase 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.

Will the NAV fluctuate?

Yes the NAV fluctuates with the value of the assets in the Fund and with the income earned by the Fund. But over the long term, the NAV is expected to remain close to its initial value as the Fund expects to distribute income received to shareholders on a quarterly basis.

If you’re looking to learn more about distributions or the distribution rate of the Yieldstreet Alternative Income Fund, please read our article on distribution rates and how they relate to the Yieldstreet Alternative Income Fund.

If you would like to learn more about the Yieldstreet Alternative Income Fund, please see the following resources:

To familiarize yourself with the details of the Yieldstreet Alternative Income Fund, it’s important that you review the prospectus, available for download on this page. Still have additional questions regarding the Yieldstreet Alternative Income Fund? Email the Yieldstreet Team at [email protected].

Investors should carefully consider the investment objectives, risks, charges and expenses of the YieldStreet Alternative Income Fund before investing.

The prospectus for the YieldStreet Alternative Income Fund contains this and other information about the Fund and can be obtained by referring to yieldstreetalternativeincomefund.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 or, 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 or 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.

This communication and the information contained in this article are provided for general informational purposes only and should neither be construed nor intended to be a recommendation to purchase, sell or hold any security or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice. Any link to a third-party website (or article contained therein) is not an endorsement, authorization or representation of our affiliation with that third party (or article). We do not exercise control over third-party websites, and we are not responsible or liable for the accuracy, legality, appropriateness or any other aspect of such website (or article contained therein).

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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 an net annualized return, using an internal rate of return (IRR) methodology, with respect to the matured investments shown in your Portfolio experience, utilizing the effective dates and amounts of subscriptions and distributions to and from the investments, net of management fees and all other expenses charged to the investments.[read more]

³ "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

⁴ Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

⁵ Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

⁶ The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes and Structured Notes programs, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including June 30, 2024, after deduction of management fees and all other expenses charged to investments.

⁷ Investors should carefully consider the investment objectives, risks, charges and expenses of the Yieldstreet Alternative Income Fund before investing. The prospectus for the Yieldstreet Alternative Income Fund contains this and other information about the Fund and can be obtained by emailing [email protected] or by referring to www.yieldstreetalternativeincomefund.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.

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⁹ Statistics as of the most recent month end.

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