Understanding AUM in Mutual Funds

Assets Under Management (AUM) refers to the total market value of all the investments held by a mutual fund. It reflects the fund's size and indicates the trust investors place in the fund's management. A higher AUM often signals a well-established and trusted mutual fund, while a lower AUM may suggest a newer or less popular fund. AUM fluctuates based on the inflow and outflow of investor money, as well as market performance.

While a large AUM can offer greater stability and lower costs per investor, it doesn't necessarily guarantee higher returns. Investors should consider AUM along with other factors like fund performance, risk, and fees before investing. In essence, AUM helps gauge the scale and success of a mutual fund but should not be the sole criterion for investment decisions.