Assets Under Management (AUM)

AUM (Assets Under Management) refers to the total value of assets managed by financial institutions on behalf of their clients. This includes stocks, bonds, real estate, cash and other investment products, and is an important indicator for measuring the size and performance of fund managers or investment companies.

 

AUM includes the client's investment funds, the reinvested portion of investment income, and the loans or leveraged funds provided by the management institution. These components together constitute the total amount of AUM, which directly affects management fee income and investment decisions.

 

The application of blockchain technology in AUM management includes asset digitization, smart contracts to automatically execute investment strategies, and transparent auditing. Asset digitization enables various types of assets to be traded on the blockchain, improving liquidity and transaction efficiency.

 

Taking real estate as an example, blockchain technology can digitize property assets into tokens, which represent partial property rights. Investors can directly purchase and trade these tokens without the traditional cumbersome procedures.

 

Smart contracts are contractual clauses that are automatically executed on the blockchain to ensure that investment strategies and fund allocations operate according to preset conditions. For example, when the price of a certain stock reaches the target value, the smart contract will automatically execute a buy or sell operation to improve investment efficiency.

 

The immutability of the blockchain makes every transaction record traceable, thereby achieving highly transparent auditing. Investors and regulators can view the flow of assets at any time, enhancing trust and regulatory compliance.

 

Traditional AUM management faces problems such as high cost, low efficiency and information opacity. Manual processing and the participation of intermediaries increase transaction costs and time, and information asymmetry also affects investors' decisions.

 

Blockchain reduces intermediary links through decentralization and smart contracts, reducing costs and time. Its transparency allows all participants to obtain accurate information in real time, reduce information asymmetry, and improve the scientific nature of investment decisions.

 

Blockchain-based asset management companies such as Tokeny and tZERO have applied blockchain technology to manage AUM worldwide. These companies use blockchain to achieve efficient asset management and transparent transaction records, which are favored by investors.

 

The growth of AUM not only reflects the performance of financial institutions, but also affects market liquidity and investment confidence. The larger the management scale, the higher the influence and market position of the institution, thus attracting more investors.