When it comes to investing in mutual funds, the size of the fund, often referred to as its AUM (Assets Under Management), can be an important consideration. AUM represents the total value of the investments that a mutual fund manages on behalf of its investors.
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.
AUM is basically the total market value of all the assets held within a mutual fund. It can include stocks, bonds, cash, etc. NAV, on the other hand, is the market value of securities divided by the total number of units on a certain given date.
So What Is Fund Size or AUM? AUM or Assets Under Management refers to the total market value of the assets that are being managed by the mutual fund. Simply put, assets under management or fund size are the overall value of the capital held by the mutual fund in the current market.
Total market capitalization is defined as the sum of the fund-specific stock market prices weighted by the total number of shares of each fund. Total Fund Size (based on NAVs) is calculated as the sum of the total number of fund shares multiplied by the NAV of each fund.
AUM meaning assets under management, which implies the cumulative sum of the market value of total securities held in a mutual fund scheme.
Calculating AUM involves aggregating the total market value of all assets that an investment manager oversees on behalf of clients. This includes a diverse range of investment vehicles such as stocks, bonds, mutual funds, ETFs, cash equivalents, and other securities.
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.
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.
Assets under management (AUM) is a metric that tells the size of a mutual fund portfolio. It refers to the total value of all the assets that a financial institution or investment manager manages on behalf of its clients. Understanding AUM is vital for investors.
Average Assets Under Management (AAUM) of Indian Mutual Fund Industry for the month of December 2024 stood at ₹ 69,32,959 crore. Assets Under Management (AUM) of Indian Mutual Fund Industry as on December 31, 2024 stood at ₹ 66,93,032 crore.
The answer is often “no”, because AUM takes into account a number of assets managed solely on behalf of clients that may not appear on a corporate balance sheet.
Many small-cap companies are usually worth about some Rs 1,000-1,500 crore. To buy a meaningful position in such a company, it is still okay for a fund managing around Rs 100-200 crore of assets.
What is CAGR in Mutual Funds? Compounded Annual Growth Rate (CAGR) is a metric used to show the returns a mutual fund generates over a given time, with the assumption that all profits are reinvested. CAGR indicates the annual growth rate of an investment, reflecting how it reaches its final value over time.
An asset manager is a financial professional who analyzes, collects and handles a client's financial portfolio. Asset managers focus on specific asset investments, such as real estate, exchange-traded funds, stocks or fixed-income securities.
A fund with a huge AUM means that the fund manager will have a higher amount of investors' money to deploy. This in turn means that they would either have to buy large stakes in some of the companies or alternatively, be ready with more investible ideas and opportunities in terms of companies.
What is the difference between NAV and AUM? NAV represents the per unit price of a mutual fund scheme on a specific date or time, whereas AUM refers to the total value of assets managed by the scheme.
This amount equals the weight of the forage consumed (consumed = ingested + trampled, see sidebar) monthly by a grazing ruminant weighing 1,000 pounds, with or without its calf (or equivalent) up to 6 months of age (Society for Range Management Glossary): 1 AUM = 26 pounds of forage consumed/day × 30.4 days/month = 790 ...
Calculation of Assets Under Management
Let us assume that a mutual fund scheme has a Net Asset Value (NAV) of Rs. 20 and the total number of outstanding units of the scheme is 20,000. The AUM can be calculated as follows: AUM = NAV x Total number of outstanding units.
Typical AUM Fee Structures Include Breakpoints
1% of assets under management per year. This is a common fee for accounts under $1 million. 0.75% of AUM for accounts between $1-5 million. As assets grow, the percentage fee often decreases.
Asset size is the total market value of the securities in a fund. It can also be referred to as assets under management. Funds regularly report total assets which can be affected by supply, demand and market return.
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.
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.