AUM (Assets Under Management) Meaning
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What Does AUM Stand For?
The AUM acronym stands for “Assets Under Management.”
It refers to the total market value of assets being managed by an investment advisor or financial institution, either from one client or many.
To define AUM precisely, the exact definition of AUM varies by institution; 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.
AUM fluctuates as the value of the assets managed changes with market performance.
What Is AUM in Finance?
When evaluating a portfolio manager, assets under management (AUM) is one metric investors consider.
Among other variables such as management performance, experience, disciplinary history, and other offered services, a greater AUM can be an indicator of a manager who has demonstrated proficiency.
Investment advisors that oversee more than $25 million in AUM must register with the Securities and Exchange Commission (SEC).
Advisors overseeing less may register with state securities administrators.
AUM Payment and Fees
Managers may charge a percentage of the total AUM they manage for a client for their services, such as 1%.
Research the required minimum of investable assets, services offered, fees, disciplinary history, and experience thoroughly prior to selecting a wealth management firm.
Assets Under Management Ranking
At present, the financial institution with the most assets under management is BlackRock, with over $6.8 trillion in assets.
In second is Vanguard Group with just over $6 trillion, followed by UBS Group with $3.26 trillion, Fidelity with $3.2 trillion, and State Street Global Advisors with $3.12 trillion.
AUM vs NAV
NAV, or Net Asset Value, is the amount of assets held by an asset management company minus all its liabilities.
It is often used as a per-share value and reflects a return on investment.
AUM, or Assets Under Management, only refers to the total amount of assets held by the company.
Assets Under management (AUM) is defined as the total amount of assets under the oversight of a particular asset management company, such as a mutual fund.
Some institutions only count discretionary funds, meaning funds that investors give for investment purposes, while other institutions also count bank deposits and more.
One of the metrics for determining the quality of an ETF, or Exchange Traded Fund, is AUM, or Assets Under Management.
The more assets that are contained in an ETF, as well as the higher the volume of trading that occurs, the less likely shares of the fund are to swing in price.
This makes these types of funds safe and stable investments.
AUM is an acronym that stands for Assets Under Management.
It typically refers to the quantity of assets, expressed as a dollar amount, that is being overseen by an asset management company.
However, it can also refer to the assets in a mutual fund, an ETF, or even an employer sponsored retirement package like a 401(k).
Under Management Meaning
Under management refers to something belonging to a client that is being managed by another party on their behalf.
In the finances industry, this typically refers to assets under management, or the assets that a wealth manager, investment advisor, or mutual fund manager is employing on behalf of their clients.
Assets Under Management Calculation
The calculation used by a company to determine its total Assets Under Management is not always consistent between companies.
Many only count discretionary funds given by investors, but others may include capital owned by executives.
Assets Under Management may also fluctuate based on the performance of investments.