Assets Under Management (AUM) Definition
Assets Under Management (AUM) refers to the total market value of investments managed by a firm or individual. In the context of crypto and blockchain, it represents the total value of cryptocurrency portfolios managed by a blockchain company, cryptocurrency exchange, or an individual crypto expert.
Assets Under Management (AUM) Key Points
- AUM refers to the total market value of assets being managed by a cryptocurrency entity such as a fund manager or exchange.
- The value of AUM can fluctuate based on investment performance and additional fund inflow or outflow.
- It is an essential metric used by potential investors and stakeholders to evaluate the size, success, and growth of a fund or management entity.
What is Assets Under Management (AUM)?
The term Assets Under Management (AUM) is primarily used in the finance and investment industry. In the context of cryptocurrency and blockchain, it is still relevant and offers insight into the portion of the crypto market being managed by a firm or individual. This management could either be active, where the asset manager is actively buying, selling and swapping assets in response to market conditions, or passive, where the manager follows a set investment strategy.
Who uses the Assets Under Management (AUM) metric?
The AUM metric is typically used by potential investors, financial advisors, and stakeholders to evaluate the size and performance of a cryptocurrency firm or individual. A high AUM value often indicates a large-scale operation with potentially numerous clients and significant financial resources.
Where is Assets Under Management (AUM) relevant?
AUM is vital in the investment sphere, which includes cryptocurrency trading and investment. It’s relevant in financial reports, company evaluations, and when creating investment strategies. It is also used in calculating management fees for fund managers.
When does Assets Under Management (AUM) fluctuate?
AUM fluctuates mainly due to two factors: the performance of the managed assets and capital inflow and outflow. As the value of the managed investments increases or decreases based on market performance, so too does the AUM. Similarly, if more funds are invested or if funds are withdrawn, this will directly impact the AUM.
Why is Assets Under Management (AUM) important?
AUM helps investors assess a firm’s size and success. Firms with high AUM are generally seen as more successful due to their ability to attract a large amount of investment. Furthermore, it gives potential investors an estimate of the scale of operations of the firm.
How is Assets Under Management (AUM) calculated?
The AUM is calculated by adding together the market value of all the investments managed by the firm or individual. This includes cryptocurrencies as well as other forms of investments, if applicable. For instance, if a crypto investment firm manages two funds, one worth $10 million and another worth $5 million, their AUM would be $15 million.
