Asset size is very important to watch when you invest in a mutual fund or an etf.
If the asset size (or) market cap. of the fund increases it shows that more people think that the fund is good and invest in it. On the other had, if the asset size decreases month after month then it shows that investors are bailing out.So if this happens one needs to analyze the issues and plan to exit if needed.

Below is a chart of the growth in asset size of a fund:

The chart clearly shows the asset size increased exponentially in a few months.

In this example, the NAV of the fund grew as follows:

Dec, 2006 = $19.11 (Asset was $115 Mil)
Aug, 2007 = $22.77 (Asset was $175 Mil)
Oct, 2007 = $25.74 (Asset was $279 Mil)
Nov, 2007 = $26.74 (Asset was $340 Mil)
Dec, 2007 = $26.44 (Asset was $420 Mil)

Currently the fund’s NAV is around $30 with asset size at $575 Mil. So as the asset size grew from $115 Mil to $575 Mil, the NAV grew by over 50%.