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AUM

Investment

Assets Under Management

The total market value of all investments managed by a fund house or portfolio manager on behalf of clients. AUM is a key indicator of a mutual fund's size and investor confidence.

Definition

Assets Under Management (AUM) is the total current market value of all investments managed by a mutual fund house (AMC), portfolio manager, or individual fund on behalf of its investors.

AUM is a measure of scale and investor confidence in the fund or fund house. It changes daily as market prices move and as investors buy (inflows) or sell (outflows) units. When markets rise, AUM increases even without new investor inflows; when markets fall, AUM drops even without redemptions.

SEBI (Securities and Exchange Board of India) uses AUM as the basis for setting maximum expense ratio limits — larger AUM funds must charge lower fees. AUM data for all Indian mutual funds is publicly reported monthly through AMFI (Association of Mutual Funds in India).

Formula

Fund AUM = Σ (Market Value of Each Holding × Units Held)

Since AUM fluctuates with markets, NAV (Net Asset Value per unit) and AUM are closely related:

AUM = NAV × Total Number of Units Outstanding

Worked Example

The Nifty 50 Index Fund of a large AMC has:

  • Total units outstanding: 50 crore
  • NAV today: ₹120 per unit

AUM = 50 crore × ₹120 = ₹6,000 crore

If markets rise 2% tomorrow and NAV becomes ₹122.40:

  • New AUM = 50 crore × ₹122.40 = ₹6,120 crore (even with no new investors)

If 2 crore new units are sold via SIPs this month:

  • New AUM = 52 crore × ₹122.40 = ₹6,364.8 crore

Use the SIP calculator to see how your own contributions compound over time.

Key Things to Know

  • Expense ratio and AUM: SEBI's Total Expense Ratio (TER) slabs are: ≤₹500 crore → max 2.25%; ≤₹750 crore → max 2.00%; ≤₹2,000 crore → max 1.75%; ≤₹5,000 crore → max 1.60%; ≤₹10,000 crore → max 1.50%; >₹50,000 crore → max 1.05%. Larger funds are capped at lower costs — benefiting their investors.
  • AUM ≠ NAV: Many new investors confuse AUM and NAV. A fund with a ₹200 NAV and a fund with a ₹20 NAV are not inherently different in quality — what matters is the rate of growth. AUM is the total pool; NAV is the per-unit price.
  • Scheme-level vs AMC-level AUM: The AUM figures AMFI publishes include both scheme-level (individual fund) and AMC-level (total across all funds of a fund house) numbers. When comparing funds, look at scheme-level AUM.
  • Folio count and AUM: An AMC can have high AUM with few but large institutional investors (less stable, susceptible to large single redemptions) or with many retail SIP investors (more stable, redemptions are spread out). Folio count alongside AUM gives a better picture of investor base quality.
  • Small-cap capacity risk: SEBI requires small-cap funds to invest at least 65% of AUM in small-cap stocks. As AUM grows, fund managers must buy more of these stocks, potentially moving their prices. This is why some popular small-cap funds temporarily pause fresh lumpsum investments once AUM crosses a certain threshold.

Related Calculators

SIP Calculator →Calculate your SIP returns instantly. Enter monthly investment, expected annual return, and time period to see total corpus, invested amount, and estimated gains.
Lumpsum Calculator →Calculate returns on a one-time lump sum investment instantly. Enter your investment amount, expected return, and duration to see total corpus and gains.

Related Terms

NAVNet Asset ValueExpense RatioAnnual Fund Expense RatioELSSEquity Linked Savings SchemeNPSNational Pension Scheme
Frequently Asked Questions
Does a higher AUM mean a better fund?
Not necessarily. A high AUM indicates investor trust and stability, but it can also make it harder for large-cap and mid-cap funds to generate alpha — a ₹50,000 crore fund can't take meaningful positions in small stocks without moving the market. For small-cap and mid-cap funds, analysts often watch for AUM-related capacity constraints.
How does AUM affect the expense ratio?
SEBI mandates a declining expense ratio slab as AUM grows. Large funds with high AUM must charge lower expense ratios — which benefits investors. A fund with ₹50,000 crore AUM is typically capped at a lower expense ratio than a fund with ₹500 crore AUM.
What is the total AUM of India's mutual fund industry?
India's mutual fund industry's total AUM has grown rapidly — crossing ₹65 lakh crore (₹65 trillion) in 2024–25. The industry has grown nearly 5× in the past decade, driven by SIP adoption, increasing financial literacy, and equity market performance.
Should I avoid a fund because its AUM is too small?
Very small AUM (below ₹100 crore) can be a risk: the fund may close if it remains unviable, causing premature redemption. However, small AUM is also where mid-cap and small-cap funds can be more agile. For large-cap funds, AUM below ₹500 crore may warrant caution about fund viability.
What is AUM in portfolio management services (PMS)?
In Portfolio Management Services (PMS) and Alternative Investment Funds (AIF), AUM refers to the total value of client portfolios managed by the portfolio manager. SEBI requires PMS providers to maintain a minimum AUM of ₹500 crore and clients must invest a minimum of ₹50 lakh.