Assets under management or
AUM is a type of
financial service which is used to estimate and approximate the money involved in an investment. Most of the
financial services establishments utilize this technique to measure their success rate.
Financial establishments normally use this assets under management service to judge their the amount of money they are managing through
investment management, money management and
mutual funds. Financial companies compare their success rate with other
financial establishments and while doing this they use
assets under management instead of revenue.
Factors behind asset under management
The prime factors responsible behind this policy of
assets under management are
foreign exchange movements, structural effects of the company, market performance gains / losses,
Net New Assets (NNA) etc. Out of these factors, the most effective one is NNA or Net New Asset. NNA is the amount of money come from any new investment by a client. Investors prefer to use this NNA for its user effectiveness. Investors sometime prefer to calculate the
NNA growth, which is a demonstration showing the relationship of NNA with the previous
AUM balance.
NNA growth is alternatively defined as organic growth.
Normally the analyst use this
assets under management philosophy to ascertain investment ratings.
Market performance gains or losses are determined by measuring the performance level in accordance with the improvement or declination of stock in a market.
Alternative definition of asset under management
Asset under management can alternatively be defined as the overall value of the assets as ascertained by the manager of
hedge fund, mutual fund or any
portfolio manager. In general it can be said that
assets under management is the market value of assets which are managed by any
financial establishment on behalf of investors.
Assets under management can be interpreted differently by some
financial establishments. They sometimes use mutual funds or bank deposits while measuring the value of the assets. Some other organizations use this philosophy of
assets under management, when their clients assigns this responsibilities to them.