What is the difference between asset under management AUM and assets under custody AUC?

What is the difference between asset under management (AUM) and assets under custody (AUC) Introduction: The Role of Assets in Finance Before we dive into the specifics, let's establish the importance of assets in the financial landscape. Assets, in simple terms, are anything of value that an individual or organization owns. They can range from cash and investments to physical properties like real estate or even intellectual property. Assets serve as the foundation for financial activities, enabling wealth creation, investment opportunities, and economic growth. Asset Under Management (AUM): A Measure of Investment Responsibility Asset Under Management (AUM) is a metric commonly used in the investment industry. It refers to the total market value of assets that a financial institution, such as a mutual fund, hedge fund, or wealth management firm, manages on behalf of its clients. AUM includes various types of assets, such as stocks, bonds, commodities, and real estate, among others. The institution's responsibility is not limited to mere custody; it involves active management, including buying, selling, and making investment decisions based on market conditions and the clients' objectives. AUM is a crucial indicator of an institution's size, influence, and expertise in the investment domain. Assets Under Custody (AUC): Safeguarding and Administrative Role Assets Under Custody (AUC), on the other hand, primarily focuses on the safekeeping and administrative aspects of assets. A financial institution acting as a custodian holds and safeguards the assets on behalf of its clients, ensuring their physical or digital security.