In finance, assets under management (AUM), sometimes called fund under management, measures the total market value of all the financial assets which an individual or financial institution—such as a mutual fund, venture capital firm, or depository institution—or a decentralized network protocol controls, typically on behalf of a client. These funds may be managed for clients/users or for themselves in the case of a financial institution which has mutual funds or holds its own venture capital. The definition and formula for calculating AUM may differ from one entity to another. Overview Assets under management (AUM) is popular metric within the investment industry, as well as in the decentralized digital asset (aka cryptocurrency) space as a measure of the size of, as well as the success of an investment management entity. The AUM of an entity is often compared with historical data to express the amount (or lack) of growth. It is also often compared with the AUM of competitors with an increase in AUM evidence of positive performance (growth). However, investment strategies may be capacity constrained. This means that the strategy's investment performance is adversely affected if it manages too much capital. Namely, its performance is adversely affected if its AUM exceeds the strategy's capacity. As a result, these funds may be closed to new investors and oversubscribed. For such funds, AUM may not be an accurate metric of the fund's success. For example, the SPDR S&P 500 index fund manages nearly 400 billion in assets. It is not capacity constrained and it is still open to new investors. In contrast, Renaissance Technologies' Medallion Fund has significantly outperformed the S&P 500 index since its inception. However, it manages fewer assets (reportedly about 34.8 billion) than the SPDR S&P 500 index fund because it is oversubscribed and closed to new investors. Methods of calculating AUM can vary between firms or decentralized protocols. Investment management companies generally charge their clients fees as a proportion of assets under management, so assets under management, combined with the firm's average fee rate, are the key factors indicating an investment management company's top line revenue. The fee structure may depend on contracted arrangements between each client and the firm or fund. Decentralized protocols also use a variety of ways to incent growth of AUM, typically in the form of offering a return to those who serve the role of providing liquidity on the protocol. Assets under management