Assets under Management
Also written AUM · Assets Under Management (AUM) · Scheme size
The total value of the money a scheme or a fund house manages — the current NAV multiplied by units outstanding — and the base on which the expense ratio is charged.
In plain language
AUM is the size of the pool. For a scheme it is everything investors have put in, plus or minus what the investments have done since, minus what has been paid back out.
It is also the number the industry is ranked on. The relative size of one AMC against another is assessed by AUM, and the growth of the industry is quoted in it.
How it works
Three things move a scheme's AUM, and only three:
- Performance. The portfolio rises or falls, so the NAV rises or falls, and AUM moves with it even if not one unit is bought or sold.
- Inflows. Fresh subscriptions after the NFO create units and add to AUM. This is why an open-ended fund can grow and a close-ended one cannot.
- Outflows. Redemptions and repurchases cancel units and reduce AUM. So does an IDCW payout — money leaving the scheme for investors' bank accounts is money no longer under management.
AUM matters to the investor because it is the denominator of the expense ratio. Recurring expenses are charged as a percentage of AUM, so the same rupee of expenses weighs less on a larger scheme.
The formula
AUM of a scheme = Current NAV × Total units outstanding
At launch, AUM is simply the amount mobilised in the NFO.
A worked example
A mid-sized equity scheme reports 12.40 crore units outstanding at an NAV of Rs 84.50.
AUM = 12.40 crore × Rs 84.50 = Rs 1,047.80 crore
Over the next month three things happen:
| Event | Effect on AUM |
|---|---|
| Portfolio gains 4%, NAV rises to Rs 87.88 | +Rs 41.91 crore |
| Fresh purchases of Rs 60 crore (units created) | +Rs 60.00 crore |
| Redemptions of Rs 25 crore (units cancelled) | −Rs 25.00 crore |
| Closing AUM | Rs 1,124.71 crore |
Notice that the first line moved AUM by Rs 41.91 crore without a single transaction by any investor, while the second and third changed the unit count. An investor reading only the AUM headline cannot tell a scheme that performed well from one that merely sold well — which is exactly why the workbook keeps NAV, units and AUM as three separate ideas.
For scale: the whole Indian industry stood at Rs 11.89 lakh crore in March 2015, Rs 66.70 lakh crore in March 2025 and Rs 73.73 lakh crore in March 2026.
Why NISM asks about it
Chapter 2.1.4 defines AUM alongside NAV and unit capital, and Chapter 2.3 uses it to describe the growth of the industry. Expect a direct computation (NAV × units), and expect the conceptual question on what makes AUM fall — where the answer that is missed is the IDCW payout, not just redemption. AUM also reappears in the expense-ratio slabs and in the trustees' core responsibility of ensuring AMCs do not mis-sell to grow AUM.
Common exam traps
- AUM is not the same as inflows. A scheme can have record inflows and shrinking AUM if markets fell harder.
- An IDCW payout reduces AUM; an IDCW reinvestment does not, because the money never leaves the scheme.
- A large AUM is not automatically good. SEBI expressly makes the trustees responsible for checking that AMCs are not mis-selling in order to grow AUM.
- Close-ended schemes cannot add AUM through inflows after the NFO — only performance moves them.
- Do not confuse a scheme's AUM with the AMC's AUM. Fund-house league tables use the second.
Where this is taught
- Series V-A · Chapter 2: Concept & Role of a Mutual Fundintroduced here
- Series II-A · Chapter 5: Basics of Mutual Fundsintroduced here
- Series II-B · Chapter 8: Basics of Mutual Fundsintroduced here
- Series V-D · Chapter 2: Concept & Role of a Mutual Fundintroduced here
- Series V-B · Chapter 2: Concept and Role of a mutual fundintroduced here
Related terms
- Net Asset ValueThe net assets of a mutual fund scheme divided by the number of units outstanding — what one unit of the scheme is worth on a given day, after every liability except the unitholders' own.
- Mutual fundA trust registered with SEBI that pools money from many investors and invests it in securities on their behalf — not a different product from shares and bonds, but a different way of owning them.
- Total Expense RatioThe all-in annual cost of a mutual fund scheme as a percentage of daily net assets — the base expense ratio plus brokerage, transaction cost and statutory levies — charged to the scheme, not billed to the investor.
- Unit capitalThe number of units a mutual fund scheme has issued multiplied by their face value — an accounting figure that records what investors contributed, not what their holding is worth today.
- IDCWThe renamed dividend option of a mutual fund scheme — a payout that is part income and part return of your own capital, which is why the NAV falls by exactly the amount distributed.
- Recurring expensesThe ongoing fees and commissions a mutual fund scheme pays its constituents, charged as a percentage of AUM and deducted before NAV is struck — so higher recurring expenses mean lower investor returns.
- Short term deposits by a schemeA capped exception letting a mutual fund scheme place cash in a bank deposit — up to 20% of its net assets, for at most 91 days — only to pay redemptions or dividends.
- Institutional investorsOrganisations rather than individuals that invest in mutual funds — companies, partnership firms, associations of persons, societies and trusts, banks and FIs, and FPIs — each acting through authorised signatories.
- Asset classA grouping of investments with similar characteristics. The workbook names four broad asset classes — real estate, commodities, equity and fixed income — each with its own sub-categories.
- Trail commissionThe commission an AMC pays a mutual fund distributor as a percentage of the current value of the investments they brought in, calculated daily and paid for as long as the investor stays invested.