Assets under management (AUM), sometimes called fund under management (FUD), refers in finance to the total market value of all financial assets that a financial institution—such as a mutual fund, venture capital firm, or depository institution<!-- includes all assets under management by firms -->—or a decentralized network protocol<!-- note some digital assets are managed by firms (e.g. Coinbase, Binance, etc while others are managed by dectralized protocols like Uniswap protocol with no firm managing the assets --> manages and invests, typically on behalf of its clients. Funds may be managed for clients, platform users, or solely for themselves, such as in the case of a financial institution which has mutual funds or holds its own venture capital. The definition and formula for calculating AUM may differ from one entity to another. such as cryptocurrency,<!-- often no firm at all is involved in "management of assets" in the decentralized assets, examples include bitcoin, Ethereum, Uniswap protocol, etc. --> to measure the size and success of an investment management entity.<!-- not merely firms, as in the 20th century and before --> AUM represents the market value of all of the securities that a financial entity owns and manages, or simply manages.

The AUM of an entity is often compared with historical data to express the amount (or lack) of growth. It is also often compared with the AUM of competitors, with an increase in AUM evidence of positive performance (growth). However, investment strategies may be capacity-constrained. This means that the strategy's investment performance is adversely affected if it manages too much capital. Namely, its performance is adversely affected if its AUM exceeds the strategy's capacity. As a result, these funds may be closed to new investors and oversubscribed. For such funds, AUM may not be an accurate metric of success. For example, the SPDR S&P 500 index fund manages nearly 400 billion in assets. It is not capacity-constrained, and it is still open to new investors. In contrast, Renaissance Technologies' Medallion Fund has significantly outperformed the S&P 500 index since its inception. However, it manages fewer assets (reportedly about 34.8 billion) than the SPDR S&P 500 index fund because it is oversubscribed and closed to new investors.

Methods of calculating AUM can vary between firms or decentralized protocols. Investment management companies generally charge their clients fees as a proportion of AUM, so assets under management, combined with the firm's average fee rate, are the key factors indicating an investment management company's top-line revenue. The fee structure may depend on contracted arrangements between each client and the firm or fund. Decentralized protocols also use a variety of ways to incentivize the growth of AUM, typically in the form of offering a return to those who serve the role of providing liquidity on the protocol.

Assets under management rise and fall. They may increase when investment performance is positive, or when new customers and new assets are brought into the firm. Rising AUM normally increases the fees which the firm generates. Conversely, AUM are reduced by negative investment performance as well as redemptions or withdrawals, including fund closures, client defections and other generally adverse events. Lower AUM tend to result in lower fees generated.

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The precise definition of AUM varies by institution, as some firms may include certain assets as being "under management", while others may not. Some include bank deposits, mutual funds, and cash in their computation, while others only consider the discretionary funds that investors have given an advisor to trade on their behalf.

While different firms may include assets that others do not in their AUM computation, Assets Under Management typically include:

  • Capital raised from investors;
  • Capital belonging to the principals of the fund management firm.

For example, if fund managers contribute of their capital to the fund and raise an additional $10B from investors, their AUM is .

Net Asset Value vs. Assets Under Management

Net asset value (NAV) is the total value of assets minus all its liabilities of a fund, such as a mutual fund or ETF, often shown on a per-share basis. NAV shows what price shares in a fund can be bought and sold at.

AUM by contrast refers to the value of assets managed by an individual or firm, not a fund. Unlike NAV, AUM is in reference to the total value of assets being managed rather than expressed on a per-share basis.