Understanding corpus and Assets under Management

Portfolio of a mutual fund indicates all the investments (individual stocks and other instruments) that have made by the fund. Certain amount of the portfolio is held in cash.

Let us try to follow what the MF corpus stands for; let us assume a very small MF has a starting investment of 1,000 units. Each of the units is worth Rs 10. Thus the total amount with the mutual fund is Rs 10,000. This amount is mentioned as the corpus. Later, more investors put in additional Rs 2,000. Now the corpus will become Rs 12,000.

On the other hand, Assets under Management (AUM) indicates the total value of the investments presently managed by the fund. Let us assume the corpus is Rs 12,000. The value of the total units has gone up owing to an increase in the price of the stocks it has invested in. As a result, the Rs 12,000 invested is now worth Rs 16,000. This amount is denoted as AUM.

Corpus and Assets under Management are indicators about the size of a mutual fund scheme.
Depending on the prevailing value of the investments, Net Asset Value or NAV of a mutual fund tends to rise or fall.