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Ch.11 · Comparing Fund Performance · easy

In a mutual fund fact sheet, what does 'AUM' refer to?

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EXPLANATION

AUM (Assets Under Management) is the total market value of all investments held by a mutual fund scheme. It reflects investor confidence and scheme size. TER is inversely linked to AUM — larger AUM typically results in lower TER on a percentage basis.

A.Annual Underwriting Margin — the profit retained by the AMC each year

B.Average Unit Market price — the mean NAV over the last 12 months

C.Assets Under Management — the total market value of investments managed by the scheme [✓ Correct]

D.Authorised Unit Maximum — the maximum units a scheme can issue

EXPLANATION

AUM (Assets Under Management) is the total market value of all investments held by a mutual fund scheme. It reflects investor confidence and scheme size. TER is inversely linked to AUM — larger AUM typically results in lower TER on a percentage basis.

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