What is the key difference between AUM and NAV?

The key difference between AUM (Assets Under Management) and NAV (Net Asset Value) lies in their definitions and calculations. AUM refers to the total market value of all the assets that a financial institution, such as a mutual fund or investment advisor, manages on behalf of clients. This figure includes a wide range of investments, encompassing securities, cash, and other assets.

On the other hand, NAV is specifically the value of a fund's total assets minus its liabilities and is often expressed on a per-share basis. This means that NAV reflects the value of each share of a mutual fund or similar investment at a specific point in time.

This distinction highlights that AUM provides a broader view of the assets managed by the institution, while NAV focuses on the valuation of individual shares in that context. Understanding this difference is crucial for investors as it impacts how they assess the scale of an investment management firm and the value of their investment in funds.