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What Is My Account Really Worth? Understanding the Difference Between AUV and NAV

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What Is My Account Really Worth? Understanding the Difference Between AUV and NAV What Is my Account Really Worth? Understanding the difference between AUV and NAV Special Report Defining the disparity determine NAV per share. These two figures represent different So if the market value of a fund’s units of value. While the $30 figure in portfolio goes up, the NAV per share the newspaper represents the mutual will also increase. Alternatively, if the fund’s Net Asset Value (NAV), the $22 total value of the fund’s portfolio drops, amount states the Accumulation Unit the NAV will decrease. A fund must Value (AUV). determine its NAV at least once each business day, usually at the close of Both are units of value used to the New York Stock Exchange determine the daily worth of customer (4:00 p.m. Eastern Time). accounts. NAV is the measure of value for shares of a mutual fund, while AUV Accumulation Unit Value is the measure of value for units of a (AUV): The newspaper reports that Separate Account. An AUV is a reflection of the underlying one of your chosen retirement Net Asset Value (NAV): Fund’s daily performance, plus any program investment options applicable dividend income, less the A mutual fund issues and sells shares daily Separate Account charge. has increased to $30 per of its own stock. An open-ended fund will continually issue as many shares as Separate accounts share. However, when investors are willing to buy. The assets A Separate Account is an account you check your retirement underlying these shares make up the established to hold pooled money fund’s investment portfolio. Therefore, earmarked for investment through account online it says $22 per an investor who buys shares of a products offered by insurance unit. Why are these values mutual fund owns an interest in the companies. A Separate Account fund’s portfolio, but does not own an can invest the funds allocated to the different? interest in any particular security. A variable investment in one or more mutual fund determines the NAV per underlying mutual funds. share in the following way: When you invest in a Separate • Establish the market price of each Account, you do not buy shares of the security in the portfolio as of the underlying funds. Instead, you buy close of the stock market and units of the Separate Account which add these values together to arrive invests in shares of the funds offered at the total asset value of the fund’s through the insurance company portfolio. product. The Accumulation Unit Value • Add other current assets and (“AUV”) is the value of each unit of subtract liabilities to arrive at total net the Separate Account invested in the asset value. funds. The following diagram illustrates these concepts: This information is provided for your education • Divide net asset value by the number only by the Voya™ family of companies. of mutual fund shares outstanding to dividend was declared. The reinvested Contractholder/ Units Separate Shares Variable dividends purchase additional shares Participant AUV Account NAV Funds at the new reduced price. Therefore, the customer now has more shares, but The Separate Account determines The effects of dividends each share is worth less than before the AUV using a complex formula Mutual Funds and NAV the dividend was declared. involving the value of the shares Mutual funds generally distribute of the underlying fund, the fund capital gains on investments and Annuities and AUV dividends, and the product’s Separate dividends from investment income Since the Separate Accounts own Account charge. When a company’s at least once a year. When this the shares, it can choose how to deal Separate Account begins investing occurs, the NAV (or price) of the fund with dividend or income distributions in an underlying fund, it generally will is reduced by the amount of the from the funds. For tax reasons, start the Separate Account AUV at distribution. the Separate Accounts generally an arbitrary price. Often the fund has choose to use these distributions to been in existence prior to the inclusion Mutual fund customers may receive increase reserves under the contracts. as a Separate Account option and the dividends in cash, or may elect to Therefore, there is no effect on a its NAV can be significantly different have them automatically reinvested in sub-account’s AUV or the number of than the Separate Account AUV the mutual fund to purchase additional units outstanding due to receipt of starting point. The Separate Account shares at the new reduced NAV. If distribution from the underlying fund. variable investment option’s AUV is a mutual fund shareholder elects determined once each business day, to receive the dividend in cash, the While the distribution of the dividend generally at the close of the New York cash value in his or her account will decreased the NAV by the amount of Stock Exchange (4:00 p.m. Eastern decrease by the total amount of the the dividend, it had no effect on the Time). Accumulation Units are valued dividend distributed to him or her. AUV. That is, while the NAV method decreases the share value and separately for each variable investment On the other hand, if a mutual option. increases the number of shares owned, fund shareholder has dividends the AUV method keeps the values the automatically reinvested back into the same as they were before the dividend mutual fund, the total account balance was declared. will remain the same as before the Not FDIC/NCUA/NCUSIF Insured I Not a Deposit of a Bank/Credit Union I May Lose Value I Not Bank/Credit Union Guaranteed I Not Insured by Any Federal Government Agency You should consider the investment objectives, risks, charges and expenses of the variable product and its underlying fund options; or mutual funds offered through a retirement plan, carefully before investing. The prospectuses/prospectus summaries/information booklets contain this and other information, which can be obtained by contacting your local representative. Please read the information carefully before investing. Insurance products, annuities and funding agreements are issued by Voya Retirement Insurance and Annuity Company ("VRIAC"), Windsor, CT. VRIAC is solely responsible for its own nancial condition and contractual obligations. Plan administrative services provided by VRIAC or Voya Institutional Plan Services LLC ("VIPS"). VIPS does not engage in the sale or solicitation of securities. All companies are members of the Voya™ family of companies. Securities distributed by Voya Financial Partners LLC (member SIPC) or third parties with which it has a selling agreement. All products and services may not be available in all states. 157270 3013008.X.P-3 © 2014 Voya Services Company. All rights reserved. CN1120-6114-1214 Voya.com 5000066.
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