What is Assets Under Management?
Assets Under Management or AUM is the overall market value of assets or money a mutual fund scheme holds. An AUM changes according to the flow of money in and out of a particular fund or company. The AUM is an indicator of the size and trust investors have in a fund house and include the returns a mutual fund earns. The fund manager manages the money as per the investment mandate. Market fluctuations, investment performance and redemptions or withdrawals do impact the assets under management
Does an AUM matter?
AUM can help you get an indication of the size of a company’s operations relative to its competitors. '
AUM is usually considered in conjunction with management performance and experience. While it is just one aspect to decide if you should invest in a particular fund house or not, higher AUM indicates a positive quality and good management experience.When investing, only the AUM shouldn’t be your investment deciding factor. Other factors like the expense ratio, reputation of the fund manager, compliance with investment mandate and the fund’s track record should be considered before you invest.