What does Asset Under Management (AUM) represent in the context of Mutual Funds?

The number of investors in a mutual fund The average return generated by a mutual fund The total cumulative market value of investments held by a mutual fund The minimum investment required to participate in a mutual fund

How does a large AUM potentially impact a mutual fund's performance?

It always leads to higher returns due to economies of scale It may limit investment flexibility and make it harder to achieve high returns It has no significant impact on the fund's performance It guarantees lower expense ratios for investors

Which type of mutual fund is LEAST likely to be significantly affected by a large AUM?

Equity Funds Debt Funds Small-cap Funds Large-cap Funds

What is the relationship between AUM and expense ratio in mutual funds?

Higher AUM typically results in a lower expense ratio There is no direct relationship between AUM and expense ratio Expense ratio is always fixed regardless of AUM Higher AUM generally leads to a higher expense ratio

What key difference distinguishes NAV from AUM in mutual funds?

AUM reflects the total market value of assets, while NAV represents the per-unit value AUM is calculated daily, while NAV is calculated annually AUM is used to assess fund size, while NAV is used to determine fund fees AUM is relevant for equity funds, while NAV is relevant for debt funds