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Assets Under Management (AUM)

Assets Under Management (AUM) refers to the total market value of all the assets that an investment firm or financial institution manages on behalf of its clients. AUM is a key metric in the financial industry, indicating the size, influence, and success of a firm. It includes a wide range of assets such as stocks, bonds, real estate, and cash equivalents. AUM can fluctuate over time due to factors such as market performance, inflows and outflows of investor funds, and changes in asset valuations.

Example

A hedge fund with $10 billion in AUM manages $10 billion worth of assets, including stocks, bonds, and other investments, on behalf of its clients.

Key points

• Represents the total market value of assets managed by a firm on behalf of clients.

• Indicates the size and success of an investment firm.

• Affects the fee structure, with management fees often based on a percentage of AUM.

Quick Answers to Curious Questions

AUM is important because it indicates the size, influence, and success of an investment firm and can affect the firm’s fee structure.

AUM can change due to factors such as market performance, inflows and outflows of investor funds, and changes in the valuation of assets.

AUM includes a wide range of assets, such as stocks, bonds, real estate, and cash equivalents, managed on behalf of clients.

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