AUM in Mutual Fund
5paisa Research Team
Last Updated: 06 Jun, 2025 03:56 PM IST

Content
- Introduction
- Full Form in Mutual Funds
- What is AUM in a Mutual Fund?
- Importance of AUM in Mutual Funds
- Significance of AUM in different funds
- AUM Investment Strategy
- Significance of AUM in Large, Medium and Small-cap Funds
- What kind of an effect does AUM have on the fees that mutual funds charge?
- How is AUM in Mutual Fund calculated?
- AUM and Expense Ratio
- Conclusion
Introduction
When analysing mutual funds, investors often come across the term Assets Under Management (AUM). It’s a key metric that indicates the total market value of the assets a fund manages on behalf of its investors. While not a standalone measure of a fund’s performance, AUM plays a crucial role in understanding its scale, investor trust, and operational efficiency.
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Frequently Asked Questions
Not necessarily. A higher AUM indicates that a fund has attracted more investor capital, which often reflects popularity and trust. However, it does not directly correlate with better performance.
Yes, AUM is dynamic and can change frequently based on two key factors: market movements and investor activity. When the value of the fund's underlying assets rises or more investors contribute money, AUM increases. Conversely, redemptions or a market downturn can reduce the AUM.
Yes, AUM is an important factor to consider, but it should not be the only one. A healthy AUM can indicate fund stability and efficient cost distribution, but it should be evaluated alongside the fund’s historical performance, expense ratio, investment objective, and the category it belongs to.
Not necessarily. A higher AUM indicates that a fund has attracted more investor capital, which often reflects popularity and trust. However, it does not directly correlate with better performance.
Yes, AUM is dynamic and can change frequently based on two key factors: market movements and investor activity. When the value of the fund's underlying assets rises or more investors contribute money, AUM increases. Conversely, redemptions or a market downturn can reduce the AUM.
Yes, AUM is an important factor to consider, but it should not be the only one. A healthy AUM can indicate fund stability and efficient cost distribution, but it should be evaluated alongside the fund’s historical performance, expense ratio, investment objective, and the category it belongs to.