In both cases, the per-share dollar amount of the fund is calculated by dividing the total value of all the securities in its portfolio, less any liabilities, by the number of fund shares outstanding.
Quoted from http://www.investopedia.com/terms/n/nav.asp
Best Answer
It means "minus any liabilities," or "after subtracting any liabilities." In other words,
( total_securities − liabilities ) / outstanding_fund_shares
It functions as a preposition modifying "the total value of all the securities in its portfolio." See http://en.wiktionary.org/wiki/less#Preposition
Credit to FumbleFingers for the more succinct phrasing.