What are Assets Under Management?
Assets Under Management (AUM) is a measure of the total value of investments and assets managed by a financial institution. It is used by both investors and financial services professionals to measure the size, worth and potential of a financial entity.
Asset Under Management is an important indicator for assessing the strength of a financial institution. For asset managers, AUM provides an important measure of their total investment portfolios and provides investors with an indication of their ability to effectively manage the portfolios that they manage.
The most common form of AUM is the market value of the assets held in custody for which the manager is responsible. This includes investments such as stocks, bonds, mutual funds and exchange-traded funds (ETFs). AUM also includes cash, derivatives, structured products and any other investments managed by the firm.
AUM can also provide useful information to investors such as the level of risk a fund or asset manager is taking. A higher AUM generally indicates a more diversified and larger portfolio which can be beneficial to investors.
AUM is also an important measure of the financial strength of a firm. Investors will often look at AUM when making decisions about their investments. AUM can indicate if an asset manager is capable of providing a long-term investing strategy as well as manage a complex portfolio of investments.
In conclusion, Assets Under Management is an important measure for assessing the size, worth and potential of a financial entity. AUM can help investors understand the level of risk a fund or asset manager is taking as well as the financial strength of a firm. It can provide essential information that can help investors make decisions about their investments.