Example of AUM for a Mutual Fund
Let's suppose that the mutual fund's portfolio consists of $1.5B in stocks, $2B in government bonds, $1.5B in corporate bonds, and $1B in cash. The total value of the fund's assets under management will be $6B.
Assets under management (AUM) is the total market value of the investments managed by a person or entity on behalf of investors. AUM fluctuates to reflect the flow of money in and out of a fund and the price performance of the assets. A fund's management fees and expenses are often calculated as a percentage of AUM.
AUM (Assets Under Management) is calculated by adding up the total market value of all the assets a financial institution manages on behalf of its clients. This includes stocks, bonds, real estate, and other investment vehicles.
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The total assets of a company may be smaller than its assets under management (AUM) because the AUM includes assets managed on behalf of third parties as well as the premium collected from their own clients. In contrast, the total assets only include the company's owned assets and are reflected in their balance sheet.
Japan's Government Pension Investment Fund remains the world's largest single asset owner, with an AUM of US$1.59trn, followed by the world's two largest sovereign wealth funds – Norway's Norges Bank Investment Management, with AUM of US$1.55trn, and China Investment Corporation, with US$1.24trn.
Fund size in mutual funds, also known as Assets Under Management (AUM), is the total value of all the assets that a mutual fund manages on behalf of its investors. This includes the capital invested by individual and institutional investors.
BlackRock, Inc. is an American multinational investment company. Founded in 1988, initially as an enterprise risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager, with US$11.5 trillion in assets under management as of December 31, 2023.
Some include bank deposits, mutual funds, and cash in their computation, while others only consider the discretionary funds that investors have given an advisor to trade on their behalf.
Blackstone is the world's largest alternative asset manager, with more than $1 trillion in AUM. We serve institutional and individual investors by building strong businesses that deliver lasting value.
Assets Under Management (AUM) represents the total market value of the capital managed by an investment fund on behalf of its clients; it's a prevalent performance metric across many fund types, such as private equity firms, hedge funds, and venture capital (VC) firms.
The sum of the market values of all the assets in the fund's portfolio. (Total Assets – Total Liabilities) / Number of Outstanding Shares or Units.
Funds under management are a specific component of AUM. This subset includes any growth funds that a manager can access, such as hedge funds and mutual funds.
The AUM can have a direct impact on the fund's performance. If a fund is a large AUM, it might be challenging for it to generate high returns. This can happen because finding the right investment opportunities that help in earning more gains without hampering the market can be tough.
Assets under management include assets from clients for which the Group provides investment advisory or discretionary asset management services. Assets that are held solely for transaction-related or safekeeping/custody purposes are not considered assets under management.
BlackRock has grown from a start-up to a market leader by attracting clients and employees, and by acquiring several other asset management companies. BlackRock's mission is to create a better financial future for our clients, by building the most respected investment and risk manager in the world.
The relative size of asset management firms is typically denoted by its client “assets under management,” or AUM. Importantly, these assets under management are owned by clients, NOT the firm, and therefore are not part of a firm's balance sheet.
But if you do have clients, consider what you could do to increase your AUM organically. That might include: Expanding the range of services you offer or bundling complementary services to add value for your clients. Offering a complimentary portfolio review to clients who have assets held away.
Importance of AUM in Mutual Funds
Assets Under Management (AUM) is a critical indicator in mutual fund analysis as it reflects the total market value of the assets that a fund manages on behalf of its investors. A higher AUM often indicates investor confidence, signaling that the fund is well-established and trusted.