Assets Under Management

By: EconomyWatch   Date: 23 November 2010

About The Author

EconomyWatch

The core Content Team our economy, industry, investing and personal finance reference articles.

EconomyWatch, Content Team

 

  • Dot Div
  •      



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.



  • Dot Div
  •      

Most Popular in Asset Management

Related Links
blog comments powered by Disqus