Assets Under Management (AUM) in Mutual Funds
Assets under management, usually shortened to AUM, is the total market value of everything a mutual fund scheme holds on a given day. It is published monthly, it appears on every factsheet, and most explanations stop there.
The part worth knowing is that AUM is not just a size label. SEBI sets the maximum a scheme can charge you by the band its AUM falls into, so the number directly decides your cost. Those bands were reduced on 1 April 2026.
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What AUM means, and how it is calculated
Assets under management is the market value of a scheme’s holdings, plus the cash it holds, minus what it owes. The full form is simply assets under management. The number moves every business day, because the prices of the underlying shares and bonds move and because investors put money in and take it out.
The calculation runs two ways and both give the same answer.
From the holdings:
AUM = market value of all securities held + cash and receivables − liabilities
From the units:
AUM = units outstanding × net asset value per unit
The second is the one you can check yourself. Multiply the scheme’s unit count by its net asset value and you have the AUM. Fund houses publish both.
Two things change AUM, and they are worth separating. Markets rising lift AUM without a single new investor. Net inflows lift it because money came in. A scheme whose AUM grew 20% in a year may have had no new money at all.
AUM and AAUM are not the same number
Factsheets carry two figures and they are often confused. AUM is the value on a particular date, usually the last day of the month. AAUM, average assets under management, is the average across every day of a period, normally a quarter.
Neither figure is what you are actually charged on. Expense limits apply to the scheme’s daily net assets, computed each business day. AAUM is a reporting and comparison metric, not the base for the charge. A fund that ended March at ₹10,000 crore after sitting near ₹7,000 crore for most of the quarter was charged on each day’s own figure, not on either headline number.
AMFI publishes scheme-level AUM monthly and AAUM quarterly. Those are the figures to use when comparing, because they are compiled on the same basis across every fund house.
Why your fund's AUM decides what you pay
| Daily net asset slab | Equity schemes | Debt and other schemes |
|---|---|---|
| First ₹500 crore | 2.10% | 1.85% |
| Next ₹250 crore | 1.90% | 1.65% |
| Next ₹1,250 crore | 1.60% | 1.40% |
| Next ₹3,000 crore | 1.50% | 1.25% |
| Next ₹5,000 crore | 1.40% | 1.15% |
| Next ₹5,000 crore | 1.35% | 1.10% |
| Next ₹5,000 crore | 1.30% | 1.05% |
| Next ₹5,000 crore | 1.25% | 1.00% |
| Next ₹5,000 crore | 1.20% | 0.95% |
| Next ₹5,000 crore | 1.15% | 0.90% |
| Next ₹5,000 crore | 1.10% | 0.85% |
| Next ₹5,000 crore | 1.05% | 0.80% |
| Next ₹5,000 crore | 1.00% | 0.75% |
| Balance above ₹50,000 crore | 0.95% | 0.70% |
Worked example. An equity scheme with ₹10,000 crore in daily net assets does not charge 1.40% on the lot. It is capped at 2.10% on its first ₹500 crore, 1.90% on the next ₹250 crore, 1.60% on the next ₹1,250 crore, 1.50% on the next ₹3,000 crore and 1.40% on the next ₹5,000 crore.
| ₹500 crore × 2.10% | ₹10.50 crore |
| ₹250 crore × 1.90% | ₹4.75 crore |
| ₹1,250 crore × 1.60% | ₹20.00 crore |
| ₹3,000 crore × 1.50% | ₹45.00 crore |
| ₹5,000 crore × 1.40% | ₹70.00 crore |
| Total on ₹10,000 crore | ₹150.25 crore |
That is an effective ceiling of 1.5025% (about 1.50%), not 1.40%. The blended rate falls as a scheme grows but never reaches the bottom slab figure, because the early slices are always charged at the higher rates.
| Scheme size | Effective maximum, equity |
|---|---|
| ₹300 crore | 2.10% |
| ₹2,000 crore | 1.76% |
| ₹10,000 crore | 1.50% |
| ₹25,000 crore | 1.38% |
| ₹60,000 crore | 1.19% |
On ₹5,00,000 invested, the ceiling is about ₹10,500 a year in the smallest band and about ₹5,960 in a very large scheme. That difference compounds for as long as you hold.
Fund houses are not obliged to charge the maximum, and many charge less, so read the actual figure on the factsheet rather than working from the cap.
What changed on 1 April 2026
SEBI reworked the expense framework under the new SEBI (Mutual Funds) Regulations, 2026, and the rules took effect on 1 April 2026. Four changes matter to anyone reading a factsheet, and the most visible is that the caps came down across every AUM band. The others change what sits inside the expense ratio.
The framework was approved at the regulator’s 212th board meeting in December 2025. Between them the four changes also shift a set of costs off the scheme and onto the fund house.
The caps came down across every band. Most slabs fell by 10 basis points, some by 15. A scheme under ₹500 crore went from a 2.25% ceiling to 2.10% on equity, and from 2.00% to 1.85% on debt.
Total expense ratio is now built up from parts. SEBI’s own wording is that the total expense ratio is the sum of the base expense ratio, brokerage, regulatory levies and statutory levies. The base expense ratio, BER, is the regulatory limit on expenses that may be charged to the scheme. These typically include management fees, distribution commission, registrar and transfer agent fees, custodian, trustee and audit costs. Statutory levies sit outside it.
GST, securities transaction tax, stamp duty and exchange charges moved outside the cap and are disclosed separately. Previously most of these sat inside the expense ratio, which meant a tax change quietly raised what the scheme cost you.
What may be charged to a scheme was narrowed. Expenses outside the permitted set are to be borne by the fund house, trustee or sponsor rather than taken from scheme assets, and new fund offer costs up to allotment now fall on the fund house. Check the operative regulations for the exact list before relying on any particular item.
Brokerage limits were tightened in the same framework. The cash market cap falls from 12 basis points, which included levies, to 6 basis points excluding them, and the derivatives cap from 5 basis points to 2. The additional 5 basis points that schemes charging an exit load were allowed has been removed altogether.
What a large AUM does and does not tell you
AUM is a measure of size. It is not a measure of quality, and treating it as one is the most common mistake made with the number. Size does affect three things that matter, and leaves untouched the things most investors assume it signals. Both halves of that are worth setting out.
What size does affect:
Cost. Larger schemes sit in lower expense bands, as the table above shows.
Liquidity of the fund’s own holdings. A very large fund in a narrow segment may have to buy and sell in bigger blocks, which can move the price against it.
The investable universe. A fund with a mandate to hold small cap stocks can face a practical ceiling, because only so many small companies carry enough traded volume to absorb a large position. Some small cap schemes have periodically restricted lump sum subscriptions for this reason.
What size does not tell you: anything about how the scheme is managed, what it holds, or what it will do next. Two schemes of identical AUM in the same category can hold very different portfolios.
The category, the mandate and the holdings are stated in the scheme information document. AUM tells you how much money is following them.
AUM of a scheme against AUM of a fund house
The same three letters describe two different things, and the gap between them runs into lakhs of crores. Only one of them has any bearing on what a given scheme costs you, so it is worth knowing which number you are looking at.
Scheme AUM is one fund. It is the figure on that scheme’s factsheet, and it is the one that sets the expense ratio band.
Fund house AUM, sometimes called AMC AUM, is every scheme that fund house runs added together. It is a measure of the firm’s size, used in industry rankings, and it has no bearing on what any individual scheme charges.
A fund house managing ₹5 lakh crore across sixty schemes can still have a small scheme sitting in the top expense band. The cap follows the scheme, not the house.
AMFI publishes both, monthly for schemes and quarterly for fund houses, on a consistent basis across the industry.
Where to find a fund's AUM
Four places carry a scheme’s AUM, and they are not always current to the same date. That matters when comparing schemes, because a month-end figure from one fund house and a quarter-end figure from another are not measuring the same thing.
The monthly factsheet, usually on the first page, dated to month end.
The scheme information document, though this is updated less often.
AMFI’s published data, which is the common basis for comparison across fund houses.
Your account statement, which shows your own holding rather than the scheme’s total. These are different figures and are sometimes confused.
When comparing two schemes, take both AUM figures from the same source and the same date. Month-end numbers from different fund houses on different dates are not comparable.
Frequently Asked Questions
AUM, or assets under management, is the total market value of everything a mutual fund scheme holds, plus cash, minus liabilities. It changes daily with market prices and with money entering and leaving the scheme. It also determines the maximum expense ratio the scheme is permitted to charge.
AUM stands for assets under management. In a mutual fund context it refers to the total value of the assets a scheme or a fund house manages on behalf of investors.
AUM equals the market value of all securities held, plus cash and receivables, minus liabilities. It can also be calculated as the number of units outstanding multiplied by the net asset value per unit. Both methods give the same figure.
AUM is the value on a particular date, usually month end. AAUM is the average across every day of a period, normally a quarter. AAUM matters more for cost, because the expense ratio is applied to daily net assets rather than to a single month-end figure.
A higher AUM places the scheme in a lower maximum expense band under SEBI’s rules, so the ceiling falls as the scheme grows. Fund houses may charge less than the ceiling, so check the actual figure on the factsheet rather than assuming the maximum applies.
From 1 April 2026 the base expense ratio for equity schemes runs from 2.10% for schemes under ₹500 crore down to 0.95% for schemes above ₹50,000 crore. Debt and other schemes run from 1.85% to 0.70%. Statutory levies such as GST and securities transaction tax sit outside these limits and are disclosed separately.
Size and quality are separate questions. A large AUM means lower maximum charges and usually easier liquidity, but it says nothing about what the scheme holds or how it is managed. In narrow segments such as small cap, a very large size can constrain what the fund is able to buy.
The monthly factsheet carries it, usually on the first page and dated to month end. AMFI publishes scheme-level data monthly and fund house data quarterly on a consistent basis, which makes it the better source when comparing schemes from different fund houses.
Disclaimer: The views expressed here are of the author and do not reflect those of Dhanvantree. Mutual funds are subject to market risks, please read the scheme documents carefully before investing.