Assets Under Management (AUM)

Assets Under Management (AUM) refers to the total market value of the investments that a Financial Institution, such as an investment firm or mutual fund, manages on behalf of its cLients. AUM is a critical measure of the size and success of an investment management company and can fluctuate based on market performance, cLient inflows, and outflows.

For example, if an investment firm manages three mutual funds with the following values:

• Fund A: $500 million
• Fund B: $300 million
• Fund C: $200 million

Then the firm’s AUM would be:

$500 million + $300 million + $200 million = $1 billion

In a case where a fund experiences significant cLient withdrawals, AUM may decrease. For instance, if $100 million is withdrawn from Fund A, the AUM would then be:

$1 billion – $100 million = $900 million

AUM is often used as a key performance indicator for investment firms, influencing their fees, Revenue, and overall reputation in the market.