The mutual fund raises capital from investors, with which invests in a portfolio of assets. These assets have variable prices and can be sold in order to purchase other assets that the portfolio manager considers promising. In order to distinguish ownership from these assets for each of the fund's investors, the mutual fund divides its entire portfolio into shares. Each share has its own value, which is equal to the total value of the fund’s portfolio (net asset value) divided by the total number of shares. This way, every investor knows exactly how much his investment is worth at any given time. When there is a new purchase of shares in the mutual fund (subscription)

Example:

Ivan invests BGN 20,000 in a mutual fund. The fund has a net asset value of BGN 1,980,000 and they are divided into a total of 200,000 shares, each with a current price, published on the company's website, of BGN 9.90. Ivan makes the purchase today, but it will be executed the next working day at the price per unit, which is announced for the next working day. The next day the price is BGN 10 per share. Ivan buys (subscribes) a total of 2,000 shares for a total of BGN 20,000. The mutual fund invests the new BGN 20,000 raised by Ivan by purchasing more shares, bonds and cash and cash equivalents. Thus, the fund already has a net asset value of BGN 2,020,000 - the initial BGN 2,000,000 plus the new financial instruments purchased with these BGN 20,000 from Ivan. The fund's shares are now 202,000 - the original 200,000 shares plus the new 2,000 shares of Ivan. After 1 year there are no new investments in the fund, but the price of one unit is BGN 10.50. Ivan can easily calculate the value of his investment, because he knows that he has 2,000 shares x BGN 10.50 = BGN 21,000.