
Asset Size
Asset size is the total market value of the securities in a fund. 1. Vanguard 500 Index Fund Admiral Shares (VFIAX) 2. SPDR S&P 500 ETF Trust (SPY) 3. Fidelity 500 Index Fund (FXAIX) 4. Vanguard TSM Index Fund Admiral Shares (VTSAX) 5. iShares Core S&P 500 (IVV) 6. Vanguard TSM Index Institutional Plus Shares (VSMPX) 7. Fidelity Government Cash Reserves (FDRXX) 8. Vanguard Federal Money Market Fund (VMFXX) 9. Vanguard Total Stock Market Index Fund (VTI) 10. Fidelity Government Money Market Fund (SPAXX) 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. 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.
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.
Asset Size Explained
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 predominantly 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 Jan. 26, 2021, Vanguard had five of the largest funds in the investment market.
- Vanguard 500 Index Fund Admiral Shares (VFIAX)
- SPDR S&P 500 ETF Trust (SPY)
- Fidelity 500 Index Fund (FXAIX)
- Vanguard TSM Index Fund Admiral Shares (VTSAX)
- iShares Core S&P 500 (IVV)
- Vanguard TSM Index Institutional Plus Shares (VSMPX)
- Fidelity Government Cash Reserves (FDRXX)
- Vanguard Federal Money Market Fund (VMFXX)
- Vanguard Total Stock Market Index Fund (VTI)
- Fidelity Government Money Market Fund (SPAXX)
Related terms:
Capital Appreciation
Capital appreciation is a rise in the value of any asset, such as a stock, bond or piece of real estate. read more
Closed Fund
A closed fund is a fund that is closed to investors, either temporarily or permanently. Learn why funds close and what this means to your investment. read more
Diversified Fund
A diversified fund is a fund that is broadly diversified across multiple market sectors or geographic regions. read more
Fund Company
Fund company is a commonly used term to describe a corporation or trust who invests the pooled capital of investors in financial securities. read more
Index Fund
An index fund is a pooled investment vehicle that passively seeks to replicate the returns of some market indexes. read more
Liquidity
Liquidity refers to the ease with which an asset, or security, can be converted into ready cash without affecting its market price. read more
Market Value
Market value is the price an asset gets in a marketplace. Market value also refers to the market capitalization of a publicly traded company. read more
Mutual Fund
A mutual fund is a type of investment vehicle consisting of a portfolio of stocks, bonds, or other securities, which is overseen by a professional money manager. read more
Total Stock Fund
A total stock fund is typically a broad index fund designed to mirror the performance of the overall equity market. read more