How to Calculate AUM?
1. AUM (Asset under management) is fluctuating, and its value changes as per the performance of invested assets in different market conditions.
2. In order to calculate AUM, three major factors are the key: the market price, inflows and outflows.
3. AMC collects investors money to invest and inflows and outflows both happens in any fund and AUM keeps changing as per the investor’s trend of calling in or calling out of funds.
4. Investors usually use net proceed to determine the AUM, net proceed if shows positive figures signifies that AUM of fund is increasing, whereas negative figure of AUM signifies that AUM is decreasing.
5. Different composition is adopted by different fund houses in deriving the AUM. Some AMC may prefer to incorporate mutual funds in addition to deposits and cash in hand, while other AMC’s only consider the funds that can be utilised for trading purpose on the clients’ behalf.