Does Big AUM Always Mean Better Returns?
Many people assume that a big AUM means stronger performance. But in investing, size isn't the whole story.
Big numbers naturally catch our attention. Many investors glance at a fund’s AUM and assume a large AUM = a strong, reliable fund. And to be fair, a high AUM does signal something valuable: a lot of people trust that fund enough to put their money there.
But while AUM is a great indicator of popularity, it’s not the full picture. It doesn’t automatically tell you how well your money will grow.
What AUM Tells You and What It Doesn’t
AUM (Assets Under Management) simply reflects how much money investors have placed into a fund. Think of it as a sign of confidence from the crowd. It’s useful as a starting point and can give you a sense of stability.
However, AUM doesn’t measure skill, strategy, or performance. A large fund can be driven by momentum, marketing, or convenience just as much as it can be driven by expertise.
Most importantly: a high AUM doesn’t guarantee better returns. In some cases, the bigger a fund becomes, the harder it is to stay nimble, and the manager’s incentives may shift toward gathering more inflows instead of maximizing performance. So while size can be reassuring, it shouldn’t be the only factor in your decision.
What Smart Investors Look At Beyond AUM
1. The People Managing Your Money
Behind every fund are real people making daily decisions. Look into:
Their experience through different market cycles
Their investment philosophy
The reasoning behind how the fund is structured
Their track record beyond just one good year
Expertise and discipline are what drive consistent long-term results.
2. Transparency and Communication
A good fund manager doesn’t only show results; they show their thinking. Look for managers who:
Share regular, clear updates
Explain market movements in a simple, honest way
Communicate why they make certain investment calls
Transparency signals alignment. It shows that your manager respects your trust and wants you to understand what’s happening with your money.
Where Simpan Comes In
Choosing a Reksa Dana shouldn’t be about following the biggest crowd. Big AUM can be a helpful indicator but it’s just one part of the story. You deserve a manager who pairs trust with expertise, clarity, and consistency.
That’s what we focus on at Simpan. We prioritize your interests, communicate openly, and manage your money with a clear, disciplined approach without conflict of interest.
If you’d like help getting started, reach out to us here. We’ll guide you through opening your account and understanding the right strategy for you.