Does it matter at all?
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Rishi Ramchandani
29 Jan 2020
Financial coach / Founder at Cafe cash flow
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Randall Tan
29 Jan 2020
Coffee boy at Century Piano
Yes, definitely! This is a fee that you should not be paying for an index fund, you already paid the expense ratio the fund. AUM for index funds should not be there in the first place. Think about it, what are they managing under index funds?
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If you are referring to Assets Under Management - then yes! Its important to consider as it shows how much they the fund is managing and shows you some form of confidence that people have in it.
Lets take the S&P500 index
SPY US - has a $300+ billion AUM, the largest
PPLC - Also tracks the S&P500 but has a much smaller AUM of $20+ million
Just based off that you know the SPY is far more popular and if you dig into why you will notice the fee's are far lower and the consistency of the institution managing it (State street) is very consistent and reputable.
So yes, AUM does matter! Hope this helps