What is 'Asset Size'

Asset size is the total market value of the securities in a fund. It can also be referred to as assets under management. Funds regularly report total assets which can be affected by supply, demand and market return.

BREAKING DOWN 'Asset Size'

Asset size for mutual funds is often reported by share class. When it comes to the size of a mutual fund for investment, bigger is not necessarily better. Key aspects for investment fund quality and investment consideration are typically the fund’s investment style and its ability to meet or exceed the returns of market benchmarks through its investment allocations.

However, the asset size of a fund can be important for investors to consider for a few reasons. While asset size does not greatly influence a fund’s performance, top investment managers and top performing funds are likely to see greater fund inflows. Investors in funds with a larger asset size can also benefit from greater economies of scale which translate to lower fund expense ratios since the expense ratio is calculated as a percent of total assets. Larger funds also tend to be more actively traded in the market with higher average daily trading volume providing for greater market liquidity.

Asset Size Volatility

Asset size can be affected by supply, demand and market return. Increasing market return is a positive factor that increases the value of the portfolio from market gains. Capital appreciation is a top priority for investment managers and a metric that is easily followed by investors. However, when assets rapidly increase from inflows so-called "asset bloat" may occur which can present challenges for the portfolio managers. Capital inflows and outflows can substantially affect operational and transaction costs. Many funds have redemption fees for short-term redemptions which help support trading activities when investors redeem.

Substantial inflows to a fund are what cause asset bloat. This is pre-dominantly an issue with active funds. Active investment managers must deploy funds into current allocations or they may choose to invest in new securities. Some funds may also limit the asset size capacity of their funds. Investment managers can choose to close funds to new investors for various reasons with asset capacity often a factor in fund closings.

Largest U.S. Funds by Asset Size

MarketWatch provides details on the investment market’s largest funds by asset size. Funds are reported by share class assets. As of January 9, 2018, Vanguard dominated the top ten list with seven of the largest funds in the investment market.

Rank Fund Name Symbol

1 SPDR S&P 500 ETF (SPY)

2 Vanguard 500 Index Fund Admiral Shares (VFIAX)

3 Vanguard TSM Index Fund Admiral Shares (VTSAX)

4 iShares Core S&P 500 (IVV)

5 Vanguard Institutional Index Fund Institutional Shares (VINIX)

6 Fidelity Government Cash Reserves (FDRXX)

7 Vanguard TSM Index Investor Shares (VTSMX)

8 Vanguard TSM Index Institutional Plus Shares (VSMPX)

9 Vanguard Total Stock Investor Shares (VGTSX)

10 Vanguard TSM Index Institutional Shares (VITSX)

RELATED TERMS
  1. Minimum Investment

    A minimum investment is the smallest dollar or share quantity ...
  2. Closed to New Investors

    Closed to new investors means a fund has decided to stop allowing ...
  3. Total Stock Fund

    A total stock fund is a mutual fund or exchange-traded fund that ...
  4. Investment Fund

    An investment fund is the pooled capital of investors that enables ...
  5. Asset Allocation Fund

    An asset allocation fund is a fund that provides investors with ...
  6. Mutual Fund

    Mutual funds combine money from many investors to invest in a ...
Related Articles
  1. Investing

    Vanguard Mutual Funds Overview (VFINX, VFIAX)

    Learn about Vanguard Mutual Funds, including its history, investment management philosophy, client base, mutual fund offerings, leadership and more.
  2. Investing

    American Funds Vs. The Vanguard Group

    Differences between two of the largest mutual fund families, American Funds and Vanguard Funds. Discover how the two companies returns match up.
  3. Investing

    FDSSX, VGTSX, PRSGX, VTWSX: Top All Cap Core Mutual Funds

    Learn how to shop for the best all-cap mutual funds, and identify five funds that invest in companies of all sizes and offer good returns with low expenses.
  4. Financial Advisor

    5 Low-Fee Vanguard Mutual Funds

    Learn about five Vanguard mutual funds that fit into your investment portfolio while charging a fraction of the fees that competitors demand.
  5. Managing Wealth

    VFIFX: Overview of Vanguard Target Retirement 2050 Fund

    Explore the Vanguard Target Retirement 2050 Fund and its investment objective, portfolio composition, management, performance and investment terms.
  6. Investing

    Vanguard Total Stock Index Vs. Vanguard 500 Index Fund

    Explore detailed analyses of the Vanguard Total Stock Market and Vanguard 500 Index funds, and learn about their characteristics and suitability.
  7. Investing

    These Top Vanguard Funds Will Help You Diversify

    These Vanguard funds offer diversification and low fees for retirement savers.
  8. Retirement

    The 8 Most Popular Vanguard Funds for a 401(k)

    Learn about some of the mutual funds in Vanguard's lineup that are popular among 401(k) investors, and find out why you should consider them.
  9. Financial Advisor

    3 Mutual Funds That Are Closed to New Investors

    Discover why some mutual funds choose to close to new investors, and learn about some of the factors that go into deciding whether to close.
  10. Investing

    The 3 Best Performing Vanguard Funds of 2015

    Learn about three Vanguard mutual funds that had the highest returns in 2015 and invest in the health care sector, broad market and international stocks.
RELATED FAQS
  1. Can you buy Vanguard funds through another brokerage?

    Learn about Vanguard mutual funds and exchange-traded funds (ETFs), and how investors can purchase them through multiple ... Read Answer >>
  2. How Do I Find Mutual Funds That Track Indexes?

    Two good sources for finding index funds are Fidelity Investments and Vanguard. Read Answer >>
  3. What are Vanguard's Admiral Shares?

    Learn about Vanguard Admiral Shares – a separate class of shares for mutual funds – with lower fees and a higher required ... Read Answer >>
Hot Definitions
  1. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  2. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  3. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  4. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  5. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  6. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
Trading Center