Glossary > Net Assets

Net Assets

Net assets refer to the total amount of assets under management for an ETF or mutual fund. The higher the net assets, the more money has been trusted to that fund.

Having high net assets doesn’t immediately mean that it is a good fund. There are many funds, like $ABALX for example, that are mostly invested in through financial advisors who get a commission for placing their clients in the fund. This results in the fund having very high net assets, while still having high fees.

Wikipedia lists the largest US mutual funds out there using net assets as their measurement. The top 10 largest include 6 Vanguard funds, 2 American funds (like the high fee one above), and 2 others. The largest investment of all the top 10 funds is in US Large Cap companies – namely those at the top of the S&P 500.

A fund with a small market cap is a reason to be concerned. Why is it small? It is new? Does it have a proven track record of matching its returns to the benchmark? Are there fees that are driving away investors? Does it have high turnover – resulting in higher taxes for you if you invest?

Understanding why a fund has its net assets is an important part of choosing an investment.