Hi Pablo -- The funds they have under management do not belong to them. That is, it's not a company asset and is simply managed on behalf of their clients. It's an important metric because their FUM determines the fees they are entitled to (eg, it might be that they charge clients 2% of funds, plus an outperformance fee -- im not actually sure what Raiz do). This is why fund managers can be highly cyclical businesses -- when markets fall they see a loss in FUM due to stock prices falling, AND because flighty investors often pull their money out. Given they have relatively fixed costs, you see some fairly harsh operating leverage at play that can see earnings take a real bath. It's also why buying into listed funds can be a great bottom of the cycle play, as that phenomenon works in reverse -- you just want to make sure you buy into a capable manager and one that can sustain themselves throughout the tough times.

Thanks Strawman, that gives me a bit to think about then. It sounds like they are not that different from a mainstream active manager with a novel way of attracting their dollars from their clients digital change collections. It will be interesting to see if they have stickier clients in a downturn given the set-and-forget nature of it and the smaller contributions it attracts.