What term is used for the price an investor pays above the NAV for mutual funds?

The price an investor pays above the Net Asset Value (NAV) for mutual funds is referred to as the public offering price. This term encompasses the total cost incurred by the investor, which includes the NAV plus any additional fees that may be applied, such as sales charges. The public offering price is significant because it represents the initial cost of entering the mutual fund investment, and it informs investors about how much they will actually be spending to acquire shares in the fund.

Other terms, while they may relate to the pricing structure or investment terms, do not specifically define the added cost above NAV in the context of mutual funds. For example, reference price usually pertains to a price used to compare investments or determine performance but does not imply a specific cost paid above NAV. Sales charge refers specifically to the fee that is added to the price of the fund shares, but it is not the overall term used to describe the final price paid by the investor. Investment principal typically refers to the initial amount invested, not the price structure of mutual fund shares. Therefore, public offering price accurately captures the comprehensive price that incorporates all applicable costs above the NAV for mutual fund purchases.