Is higher AUM good or bad?
A fund with a large AUM signifies higher participation from investors and a fund with low AUM signifies lower interest in that fund. Though a fund with a large AUM might not be the best choice always, there could be funds with lower AUMs but with better track records and risk/return metrics.
What if AUM is high?
Funds with higher AUM can typically have higher market trading volumes which positively influence the liquidity of a fund. Mutual fund investors often look at the fund’s AUM and get impressed if it is on the higher side.
How does high AUM affect mutual funds?
The impact of a large AUM affects mid cap and small cap companies. The main reason behind this, is that small cap companies invest in high growth potential companies, which are still growing . Such a situation arises when the assets under management for the given mutual fund rises beyond a certain mark.
What is a big AUM?
Since it is calculated as a percentage of AUM, a larger AUM means higher fees for the fund house while a smaller AUM means the opposite. For equity mutual funds, SEBI permits a maximum total expense ratio of 2.5\% for the first Rs.
What is the AUM of ICICI Prudential corporate bond fund-growth?
ICICI Prudential Corporate Bond Fund-Growth has ₹20,276 Crores worth of assets under management (AUM) as on 30/06/2021 and is medium-sized fund of its category. The fund has an expense ratio of 0.58\%, which is higher than what most other Corporate Bond funds charge..
How safe are corporate bond funds?
The credit ratings offered by rating organisations such as CRISIL or Value Research can be used to assess the safety of corporate bonds. Corporate bond funds, also known as non-convertible debentures, are debt funds that invest at least 80\% of their capital in corporations with the best credit ratings.
What are the advantages of debt funds?
In debt funds, investors can withdraw required money from the investment at any point in time and can let the remaining money stay invested. c. Since debt funds largely invest in government securities, corporate debt and other securities like treasury bills, etc., they are not affected by equity market volatility.
How to select the best debt fund for your investment?
Investors need to be clear on their time horizon of investment when selecting the best Debt fund for their investment and also factor in the interest rate scenario. For investors with a very short holding period, say for a couple of days to a month, Liquid Funds and ultra- short term funds may be relevant.