Net tangible assets, usually shortened to NTA, describe what remains after liabilities and intangible assets are deducted from total assets. For a listed investment company or trust, the result is commonly expressed per share or unit. Moneysmart explains NTA in its LIC and LIT guide.

The word “net” matters. Looking only at what a portfolio owns would leave out amounts it owes. The per-share calculation also matters: a large fund’s total asset value cannot sensibly be compared with a smaller fund’s per-share figure.

Here is a simplified hypothetical example:

• Total assets: $12 million.
• Liabilities: $1.5 million.
• Intangible assets: $0.5 million.
• Shares on issue: 5 million.

The NTA is $10 million, or $2.00 per share: ($12 million − $1.5 million − $0.5 million) ÷ 5 million. These invented figures illustrate the arithmetic only.

You may also see net asset value, or NAV. NAV deducts liabilities from assets; NTA additionally excludes intangible assets. The measures can be similar for some portfolios, but their labels should not be exchanged without checking the calculation. Investor.gov’s NAV explanation describes the basic assets-minus-liabilities calculation.

An NTA number needs a date and a basis. A statement published this month might describe the portfolio at last month’s end. A before-tax figure and an after-tax figure may also differ. The accompanying notes explain what has been included.

NTA is a valuation snapshot, rather than a promised selling price. The exchange price can be higher or lower, and asset values can change after the snapshot. A clear comparison therefore keeps the share-price date, asset-valuation date and tax basis visible together.

Educational information only. It does not take account of your objectives, financial situation or needs.