|

[empty]

In a managed investment service, what is a high-watermark performance fee?

December 5, 2022

A high-watermark performance fee is a fee structure used in managed investment services where the investor is only charged a performance fee on the investment if the value of their investment has increased above the previous highest value, or “high-watermark.” In other words, the investor is only charged a performance fee on the amount of their investment that represents an actual gain, rather than on the entire investment amount regardless of whether it has increased in value or not. This fee structure is intended to align the interests of the investor and the manager, as the manager is only rewarded for generating actual gains for the investor.

“’Kindly let me help you or you will drown,’ said the monkey putting the fish safely up a tree.” – Alan Watts

sc name=”fma-cta”]

This website is owned and operated by Investor Unity Pty Ltd (ABN: 90 160 624 331). Any advice included in this website or correspondence is general advice only and is based solely on consideration of the investment or trading merits of the financial products alone, without taking into account the investment objectives, financial situation or particular needs (i.e. financial circumstances) of any particular person. In addition to its internal services, Investor Unity is compensated by brokers and other third parties by way of referral/affiliate and/or general partnership arrangements, via its websites and other communications. Investor Unity is genuinely interested in your long-term trading & investment success. We advise you to take all necessary steps to ensure you have a good understanding of the products & services you’re considering investing in – particularly if they involve leverage. While Investor Unity takes every care to ensure that we only deal with the highest quality services, from throughout the industry, past performance is not a guarantee of future performance. Before making an investment or trading decision based on the general advice, the recipient should carefully consider the appropriateness of the advice in light their financial circumstances and should carefully review the PDS of the relevant financial product as provided by your investment broker. Past results are not a guarantee of future performance. Please contact us, to discuss any questions or concerns you may have- we are here to help.