Assets Under Management (AUM)

The acronym AUM stands for "Assets Under Management" which refers to the totalmarket value由一个客户或许多客户管理的投资顾问或金融机构管理的资产。

“管理”是指属于客户代表另一方管理的客户，即财富/基金经理。

In the finance industry, this refers to assets under management, or the assets that an investment advisor, wealth manager, or mutual fund manager is employing on behalf of their clients.

The exact definition of AUM varies by the 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 keeps fluctuating as the value of the assets managed changes with market performance. Funds with larger AUM tend to be more easily traded.

A fund's management fees (including expenses) are often calculated as a percentage of AUM.

Understanding AUM in brief

This refers to how much money ahedge fund or financialinstitution manages for its clients, i.e. the sum of the所有人的市值of the investments managed by a wealth management firm, aventure capital公司，基金或资金家族，经纪公司或个人注册作为投资组合经理or an investment advisor.

AUM can be segregated in many ways and refer to the total assets managed for all clients or specific clients.

AUM also includes the capital that the fund/wealth manager can use to make transactions for one or all clients.

For example, if an investor has $25,000 invested in a mutual fund, those funds become part of the total AUM, i.e. the pool of funds. The fund manager can buy/sell shares using all invested funds following the fund's investment objective without obtaining special permissions.

Within the wealth management industry, some fund managers may have requirements based on AUM, such as a hedge fund. In other words, an investor may require a minimum amount of personal AUM to qualify for a certain type of investment.

Wealth managers want to ensure that their clients can withstand adverse markets without taking too large of a financial blow.

Individual AUM of investors can also determine the type of services the investor will receive from a financial advisor or brokerage company. In some cases, personal AUM may also coincide with an individual'snet worth.

Calculating AUM

Methods for calculating AUM vary among companies. AUM can fluctuate daily as it depends on the flow of investor money in and out of a particular fund.

Other factors like reinvested dividends, capital appreciation, and asset performance will also increase the AUM of a fund. The total firm AUM also increases when new customers and their assets are acquired.

因素导致资产管理包括减少下降market value from investment performance losses, fund closures, and a reduction in investor footfall. AUM can be limited to all the investor capital invested across the firm's products, or it can include wealth owned by the investment company executives.

In the US, the证券交易委员会（SEC）has assets under management that vary among companies. AUM depends on requirements for funds and investment firms in which they must register with theSEC.

The SECregulates the financial marketsand is responsible for ensuring that it functions in a fair and orderly manner. Depending on several factors, the SEC requirement for registration, including the firm's size and location of the firm can range from $25 million to $110 million in AUM.

Why Assets Under Management Matters
Fund management will monitor this as it relates to investor product flows and investment strategy in determining the company's strength. Investment companies use this as a marketing tool to attract new investors.

AUM can help investors determine the size of a company's operations relative to its competitors. It may also be an essential consideration for the calculation of fees.

Also, many managers and financial advisors charge their clients a percentage of their total assets under management. This percentage declines as the Assets Under Management increases; in this way, these financial professionals can attract high-wealth investors.

Why Assets Under Management are Calculated

The total value of AUM is a key performance indicator of success and a measure of the size of a financial institution, as a larger AUM generally translates into more significant revenue in the form of management fees.

That is why financial institutions look at the value of AUM and compare it to competitors and their history to assess business trends.

此外，AUM的价值可能决定机构是否必须遵守特定法规。监督超过2500万美元AUM的投资顾问必须在证券交易委员会（SEC）.

The way investors or institutions calculate this can differ slightly. Some banks may include mutual funds, deposits and cash and their calculations.

Other institutions only consider the funds the institution can use to trade on behalf of the clients under discretionary management.

管理资产如何随着时间而变化

The amount of asset under management changes due to the:

• The dividends paid by the companies in the institution's portfolio, if reinvested and not distributed.

• Inflows/outflows of funds. For example, an investor in a mutual fund can change the total size of the fund's AUM simply by increasing or reducing the size of their investment by selling the ones they already own or buying additional shares in the fund.

• Value of the securities invested in. For example, when the market value of its securities increases/decreases, a mutual fund will experience an increase/decrease in AUM.

由于上述因素，资产的管理价值不断变化。

The factors above mentioned also help determine how fast AUM change.

For example, other conditions held equal are:

• A fund that invests in low-volatility, stable securities will experience lesser fluctuations in AUM than a fund that invests in volatile securities.

• A fund with a stable and committed investor base will demonstrate lesser volatility in its AUM than a fund with frequent inflows and outflows.

However, the volatility in AUM can also depend on whether the securities owned are liquid or how often they are marked to market.

• For example, extremely illiquid securities may not trade as often as liquid assets, and the impact of it on the AUM may not be as frequent.

• Private securities may not be marked to market very often, which results in the value of AUM not changing as frequently as it does with a traded security.

资产管理和投资者资金的波动

频繁且大量流入和流出的基金将在AUM中经历更多的波动性。这将阻碍有效的投资策略，尤其是在有针对性投资的情况下是流动性的。

To avoid the potential risk of damage from frequent inflows and outflows, institutions such as hedge funds or mutual funds can rely on some partial solutions:

• Closing the fund permanently or temporarily to investors so that additional money can't flow in.

• Lock-up periods generally range between a few months and a few years, during which withdrawing funds is impossible.

上面提到的措施很有帮助，因为：

• They help the institution avoid forced selling or buying securities in illiquid markets, which in this case will be problematic.

• They help avoid excessive growth in AUM that could lead to allocation problems. It is often difficult to invest and manage large amounts of money effectively, primarily if the fund aims for outperformance vs benchmarks.

If the volatility is under control, the manager can pursue its investment strategy without having to increase/decrease its positions due to inflows and outflows.

Assets Under Management as a Measure of Success

无论是与资产经理，银行，保险公司或其他金融机构打交道，公司的AUM规模都可以衡量其成功，因为它通常与其他KPI相关。

• 较大的AUM意味着如果ROA恒定或不显着变化，则意味着更高的收入。

• AUM size is also a measure of prestige for the management and its institution, as they are usually ranked based on this metric.

• 管理层的薪酬和奖金套餐通常取决于其管理资产的规模。

Assets Under Management and Fund Performance

For asset managers who invest with target outperformance vs benchmarks and an active style, excessive growth in AUM can be a negative factor.

• 大量资金可以挑战分配，而不会影响出售和出售的证券的价格。

• Asset managers usually need to increase diversification due to more significant amounts of money flowing in, which can produce an opposite result than the goal of achieving a significant outperformance vs benchmarks.

The biggest asset managers in the world

The following is a list of the top 10 asset managers in the world (as of 2022), ranked by totalassets under management:

Rank	Firm/company	Country	AUM (billion USD)
1	BlackRock	United States	9,570
2	Charles Schwab	United States	8,140
3	Vanguard Group	United States	8,100
4	瑞银	United States	4,380
5	Fidelity Investments	United States	4,283
6	State Street Global Advisors	United States	4,020
7	Morgan Stanley	United States	3,230
8	JPMorgan Chase	United States	2,960
9	Allianz	United States	2,760
10	Capital Group	United States	2,700

Examples

Let's take the example of a mutual fund with a diversified portfolio of股票和债券and a significant cash position. Let's suppose that the mutual fund's portfolio consists of $2.5B in stocks, $1.2B in government bonds, $2.8B in公司债券, and $1.5B in cash.

The total value of the fund's AUM will be $7B.

由Rohan Kumar Singh进行了研究和撰写|LinkedIn

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