assets under management
The total market value of investments that a financial institution or fund manager oversees on behalf of clients.
Example
“Blackrock manages over $9 trillion in assets under management — more than the GDP of most countries.”
Memory Tip
AUM = Assets Under Management. How big is the fund? AUM tells you.
Why It Matters
Assets under management reflects the size and credibility of a financial institution, which can indicate their experience and resources. When choosing a fund manager or financial advisor, the AUM can help you assess whether they have significant capital and expertise managing investments similar to yours.
Common Misconception
Many people believe that a larger AUM automatically means better investment returns or safer management. In reality, a huge AUM does not guarantee superior performance, and sometimes smaller, more specialized firms deliver better results for specific investment strategies.
In Practice
A mutual fund company might have 50 billion dollars in assets under management across 200 different funds. If you invest 10,000 dollars in one of their funds, your money becomes part of that total AUM figure, and the fund manager uses their expertise to allocate all 50 billion dollars across thousands of securities on behalf of all their clients.
Etymology
ASSETS (investments owned) UNDER (being overseen by) MANAGEMENT (professional oversight). Investments MANAGED on behalf of clients.
Common Misspellings
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See Also
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