Mutual funds and exchange-traded funds report the value of their holdings with seeming precision every trading day. But in some cases there is far less certainty about the worth of a fund’s holdings than that per-share “net asset value”—which may be quoted out to tenths or hundredths of a penny—might suggest.

When a fund owns assets that haven't recently been traded in the marketplace, the NAV is partly based on judgments about what those securities might command if they were to change hands.