What are Assets Under Management ?

Assets under management (AUM) is a financial metric that represents the total market value of assets that a financial institution, such as an investment management firm or a financial advisory company, manages on behalf of its clients or investors. These assets can include various types of investments, such as:

• Equities: Stocks or shares of publicly traded companies.

• Fixed Income Securities: Bonds, treasury bills, corporate bonds, municipal bonds, etc.

• Cash Equivalents: Short-term, highly liquid investments like money market funds or certificates of deposit (CDs).

• Real Estate: Direct property holdings, real estate investment trusts (REITs), or other real estate-related investments.

• Alternative Investments: Private equity, hedge funds, commodities, derivatives, etc.

• Other Financial Instruments: Depending on the firm's focus and expertise, AUM might also include investments in venture capital, infrastructure, or other specialized areas.

AUM is a critical metric for financial institutions as it reflects their scale, growth, and success in managing client assets. The fees earned by the institution for managing these assets are often calculated as a percentage of AUM, known as the management fee.

Financial regulators may require investment firms to report their AUM regularly, providing transparency to investors and regulators. Additionally, AUM is often disclosed in financial reports, marketing materials, and regulatory filings, giving stakeholders insight into the size and scope of the firm's operations.