How to Calculate NAV Per Unit for an Investment Club
NAV per unit is the simplest and fairest way to track what each member's stake is worth — and it handles contributions and withdrawals at different times without any complex adjustments.
Why not just count shares?
The simplest approach to investment club accounting is to divide the portfolio equally between members. But this breaks down the moment members contribute at different times or in different amounts.
If you join when the portfolio is worth £5,000 and contribute £1,000, you shouldn't own 20% of the club — because 20% of the current £5,000 value is £1,000, but the existing members who built that £5,000 from a lower base would be giving up some of their gains.
Unit-based accounting solves this. Each member buys units at the current NAV per unit when they contribute. Their ownership percentage is simply their units ÷ total units outstanding.
The formula
NAV = Total portfolio value (at current prices) + Cash held − Any liabilities
NAV per unit = NAV ÷ Total units outstanding
New units issued = Contribution amount ÷ NAV per unit at time of contribution
A worked example from scratch
Month 1: Club formed, 3 members each contribute £500
Starting NAV per unit: £1.00 (arbitrary — this is the seed price)
Each member receives: 500 units
Total units: 1,500
Total NAV: £1,500
Month 6: Portfolio grows to £2,100
NAV: £2,100
Units outstanding: 1,500
NAV per unit: £2,100 ÷ 1,500 = £1.40
Month 7: New member joins, contributes £700
NAV per unit: £1.40
New units issued: £700 ÷ £1.40 = 500 units
Total units: 2,000
New member owns: 500 ÷ 2,000 = 25%
Each original member owns: 500 ÷ 2,000 = 25%
The new member owns 25% — exactly the right amount. They contributed £700 for 25% of a £2,800 portfolio (£2,100 existing + £700 new). The original members still have their full £700 each (500 units × £1.40).
Monthly contributions
Most investment clubs collect a fixed monthly subscription from each member. Under NAV per unit accounting, this works exactly the same way: each month's subscription buys units at that month's NAV per unit.
A member who contributed in month 1 at £1.00/unit will have more units than one who contributed the same amount in month 12 at £1.40/unit — which is correct, because the month-1 contributor took more risk and helped grow the portfolio.
Withdrawals and exits
When a member wants to withdraw, you calculate the current NAV per unit, multiply by their units, and pay them out. Their units are cancelled, reducing the total units outstanding.
Current NAV per unit: £1.80
Exiting member's units: 500
Payout: 500 × £1.80 = £900
Cost basis for CGT: 500 × £1.00 (original entry price) = £500
Taxable gain: £400
Tracking NAV per unit over time
NAV per unit is calculated at a point in time using the current market prices of every holding. For ongoing tracking, most clubs calculate it once a month — usually on the last working day of the month.
The NAV per unit chart is also the most useful performance measure for an investment club: it shows growth on a per-unit basis, independent of the total size of the fund or contributions made.
Live NAV per unit — always up to date
HWSW calculates your fund's NAV per unit in real time using live prices, tracks each member's units from their first contribution, and shows everyone exactly what their stake is worth.