Assets under management

Assets under management

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Assets under management (AUM) is a financial term used denote the market value of funds being managed by a financial instutition on behalf of its clients, investors, depositors, etc. This metric is a sign of size and success against competition. The AUM is calculated by different methods.

Description


The term is used in reference to the financial services industry such as mutual fund
Mutual fund
A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...

s, hedge fund
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...

s, private equity fund
Private equity fund
A private equity fund is a collective investment scheme used for making investments in various equity securities according to one of the investment strategies associated with private equity....

s, money management
Money management
Money management is the process of managing money which includes investment, budgeting, banking and taxes. It is also called investment management....

, investment management
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...

, wealth management
Wealth management
Wealth management is an investment advisory discipline that incorporates financial planning, investment portfolio management and a number of aggregated financial services...

, and private banking
Private banking
Private banking is banking, investment and other financial services provided by banks to private individuals investing sizable assets. The term "private" refers to the customer service being rendered on a more personal basis than in mass-market retail banking, usually via dedicated bank advisers...

 businesses and how much money they are managing. It is sometimes used as a yardstick for success and for comparison of companies within an industry. Asset under management balances consist of market performance gains/(losses), foreign exchanges movements, net new assets (NNA) inflow/(outflow), and structural effects of the company, such as acquisitions.

Investors may also be interested in the NNA (sometimes called net new money or NNM), which indicates how much client money has been newly invested. Client assets are transactional assets, which are used as collateral for specific transactions, e.g. margin
Margin (finance)
In finance, a margin is collateral that the holder of a financial instrument has to deposit to cover some or all of the credit risk of their counterparty...

accounts. It is common to calculate the key figure NNA growth, which shows the NNA in relation of the previous AUM balance on an annualized basis.

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