Saturday, December 4, 2010

Funds Under Management

Funds Under Management: Funds Under Management, or FUM, is the total amount of funds under management. The level of FUM a fund manager has will rise and fall based on inflows and outflows as investors save for the future and naturally withdraw at some point. Aside from net flows FUM will also change based on capital markets movements i.e. investment returns (as well as the profitability of the fund e.g. expenses to the fund will reduce FUM, as will taxation). FUM can also be used as one aspect of assessing a fund manager; there are two key considerations, 1. a good fund manager may attract a large amount of FUM, and paradoxically, 2. a fund manager with a large amount of FUM may generate lower returns due to size constraints.

Synonyms: Assets under management, Fund size, Total invested assets, Net assets

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