- August 6, 2026
Two mutual funds can invest in similar stocks and even generate comparable returns, yet one may manage ₹500 crore while another oversees more than ₹1 lakh crore. This difference is captured by Assets Under Management (AUM), a metric that reflects the size of a mutual fund scheme.
While AUM alone cannot tell you whether a fund is good or bad, it provides useful insights into investor participation, liquidity, and operating efficiency. Understanding what AUM represents and how it differs from NAV can help you evaluate mutual funds more effectively.
Accordingly, this article explains what AUM in mutual funds is, the importance of AUM in Mutual funds and the difference between AUM and NAV.
What is AUM in Mutual Fund?
Assets under management (AUM) is the market value of all assets managed by a mutual fund company or a particular scheme. For instance, as per the Association of Mutual Funds of India (AMFI), the total AUM of the Indian mutual fund industry as of June 2026 stood at ₹82,22,480 crore.
This represents the assets managed by all mutual fund companies in India. This includes all schemes managed by the industry across asset classes: equity funds, fixed income instruments, and commodities. AUM determines the maximum expense ratio (TER) that a mutual fund can charge under SEBI regulations.
For instance, Parag Parikh Flexi Cap Fund’s AUM as of June 2026 stood at ₹143,388 crore. This is the assets managed by that scheme, and ₹1,64,057 crore is the total AUM managed by Parag Parikh across its schemes. AMFI publishes industry AUM data every month, which market participants use to gauge the growth and performance of the mutual fund industry.
With ₹12.5 lakh crore of AUM, SBI Mutual Fund is the top AUM mutual fund in India.
Top AUM Mutual Fund Houses in India
| AMC | Quarterly AUM (As of 30 June 2026) |
|---|---|
| SBI Mutual Fund |
₹12.5 lakh crore (As of December 2026) |
| ICICI Prudential Mutual Fund | ₹11.17 lakh crore |
| HDFC Mutual Fund | ₹9.35 lakh crore |
| Nippon India Mutual Fund | ₹8.62 lakh crore |
Source: SBI Mutual Fund RHP, Investor Presentations
Difference Between AUM and NAV
AUM and NAV are often used together, but they measure two different aspects of a mutual fund. AUM is the total market value of assets managed by a mutual fund scheme or investment manager, or fund house.
Net asset value (NAV), on the other hand, is the value of one unit of a particular scheme. In simple terms, it is the share price of a mutual fund scheme.
For example: suppose a mutual fund scheme manages AUM worth ₹95 crore. If the scheme has one crore outstanding units, then the NAV of that particular scheme is ₹95. NAV is simply the net asset (difference between Fund Assets and Fund Liabilities) divided by the number of outstanding units (1 crore).
AUM measures the size of the fund, while NAV measures the price per unit. When you invest in a mutual fund, you are allotted units based on the prevailing NAV. The number of units you receive depends on the amount invested and the scheme’s NAV on the allotment date.
This NAV is calculated and updated every business day after market hours. For instance, while Parag Parikh manages an AUM of ₹1,43,388 crore, the scheme unit price stood at ₹89.8. This implies that the scheme had 1,596.7 crore outstanding units as of 30 June, 2026.
| AUM | NAV |
|---|---|
| Total market value of all assets managed by a fund, scheme, or investment manager. | Value of one unit (share) of a mutual fund scheme. |
| Measures the size of the fund. | Measures the price per unit. |
| Expressed as a total amount. | Expressed as a per-unit value. |
| Changes due to investment performance and investor inflows or outflows. | Changes primarily due to investment performance and, occasionally, income distributions. |
AUM calculation in mutual funds
AUM calculation in mutual funds is simple. Consider Parag Parikh Flexi Cap Fund as an example. The scheme has 1,596.7 crore outstanding units and an NAV of ₹89.8. Multiplying the two gives an AUM of approximately ₹1,43,388 crore.
Mutual Fund companies calculate this figure daily after the end of business hours and report it monthly through industry bodies like AMFI. Daily updates are necessary because asset prices fluctuate during trading hours, and investors invest and redeem their units.
Therefore, the asset value at the end of the day reflects the total funds managed by a mutual fund scheme.
Importance of AUM in Mutual Funds
AUM is an important metric because it reflects the size of a mutual fund and the amount of money investors have entrusted to it. While AUM alone should not determine your investment decision, it offers useful insights into a fund’s scale, liquidity, and operational efficiency.
Indicates the Size of the Fund
AUM shows the total value of assets managed by a mutual fund scheme. A growing AUM often indicates that more investors are investing in the fund or that the fund’s portfolio has appreciated over time, or both.
Reflects Investor Confidence
Consistent growth in AUM can signal strong investor confidence in the fund’s performance, investment strategy, and fund manager. However, AUM should always be evaluated alongside long-term returns, relative outperformance and portfolio quality.
Affects Liquidity
Funds with a larger AUM generally have better liquidity, making it easier for fund managers to buy and sell securities without significantly affecting market prices. This is particularly beneficial for large-cap equity and debt funds.
Helps Spread Fixed Costs
Managing a mutual fund involves expenses such as administration, compliance, and fund management. A larger asset base allows these fixed costs to be spread across more assets, potentially improving cost efficiency. Mutual funds follow a telescopic expense structure (mandated by SEBI) that reduces the expense ratio as the assets grow (discussed below).
Can Influence Investment Strategy
While a larger AUM provides greater financial strength, it may also reduce flexibility in certain categories. For example, small-cap and mid-cap funds with very high AUM may find it harder to deploy fresh capital without affecting stock prices. In contrast, a moderate-sized fund may have greater flexibility to invest in emerging opportunities.
Useful for Comparing Similar Funds
AUM can be a helpful comparison metric when evaluating funds within the same category. It provides context about the fund’s scale but should never be used in isolation. Investors should also consider returns across market cycles, risk-adjusted performance, expense ratio, portfolio composition, and the fund manager’s track record.
Calculation of Expense Ratio
As mentioned above, the mutual fund industry follows the Securities and Exchange Board of India’s mandatory telescopic expense ratio regulations. Simply put, the lower the AUM of a particular scheme, the higher the expense ratio. As AUM increases, expense ratios decrease up to a certain base level.
| AUM | TER for Equity Funds (%) | TER for Debt Funds (%) |
|---|---|---|
| On the first ₹500 crore | 2.25 | 2.00 |
| On the next ₹250 crore | 2.00 | 1.75 |
| On the next ₹1,250 crore | 1.75 | 1.50 |
| On the next ₹3,000 crore | 1.60 | 1.35 |
| On the next ₹5,000 crore | 1.50 | 1.25 |
| On the next ₹40,000 crore | TER reduced by 0.05% for every additional ₹5,000 crore (or part thereof) | TER reduced by 0.05% for every additional ₹5,000 crore (or part thereof) |
| Above ₹50,000 crore | 1.05 | 0.80 |
As you can see in the table, schemes with lower AUM generally have higher TER, while the TER decreases as AUM increases. As NAV is calculated after deducting the expense ratio, a higher TER reduces the NAV over time and vice versa. However, TER should not be the only criterion when choosing a mutual fund scheme.
Conclusion
To conclude, AUM is a useful indicator of a mutual fund’s size and growth, but it should never be viewed in isolation. While it provides insights into investor participation, liquidity, and cost efficiency, factors such as long-term performance, portfolio quality, risk, expense ratio, and fund management remain equally important when selecting a mutual fund.
FAQs
1. Can Two Mutual Funds Have the Same NAV but Different AUM?
Ans: Yes. Two mutual funds can have the same NAV but different AUM. NAV represents the value of one unit, whereas AUM is the total value of assets managed by the fund. A fund with more outstanding units can have a much larger AUM even if its NAV is the same.
2. Can a mutual fund's AUM decrease over time?
Ans: Yes. A mutual fund’s AUM can decrease due to a fall in the market value of its investments or when more investors redeem their units than invest. Changes in AUM are normal and should be considered along with the fund’s overall performance and investment strategy.
3. Can I compare AUM of different mutual funds on MutualFundWala?
Ans: Yes. MutualFundWala provides information on various mutual fund schemes, helping investors compare key parameters such as AUM, returns, expense ratio, risk, and fund category. Comparing multiple factors enables investors to make more informed investment decisions.
4. Does MutualFundWala offer personalized investment advice?
Ans: No. MutualFundWala is an AMFI-registered mutual fund distributor and does not provide personalized investment advisory or portfolio management services. Investors should assess their financial goals and consult a SEBI-registered investment adviser if they require personalized investment advice.
5. Where Can I Check the Latest AUM of a Mutual Fund?
Ans: Investors can find the latest AUM on the official website of the respective Asset Management Company (AMC), the Association of Mutual Funds in India (AMFI), or on mutual fund factsheets published every month. These sources provide updated AUM figures for individual schemes and fund houses.
6. Does AUM affect NAV?
Ans: No. AUM and NAV measure different aspects of a mutual fund. AUM shows the total assets managed by the fund, while NAV is the value of one unit. Changes in AUM do not directly affect the fund’s NAV.
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About the Author
Mr Shashi Kant Bahl
Mr. Shashi Kant Bahl is a mutual fund professional with nearly 20 years of experience in the financial services industry. Since 2005, he has helped over 10,000 investors manage their mutual fund investments and build long-term wealth. His firm currently manages assets of over ₹734 crore (AUM).
Disclaimer: Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.
