Got a credit card? use our Credit Card & Finance Calculators
Thanks to Rhyd6,eyeball08,Wondergirly,bofh,johnstevens77, for Donating to support the site
HY IT - AIC Sector Performance fee concern
-
- Lemon Quarter
- Posts: 4432
- Joined: May 31st, 2019, 7:55 pm
- Has thanked: 691 times
- Been thanked: 1350 times
HY IT - AIC Sector Performance fee concern
Looking down the list and first impression is that the ongoing charge and performance fee is a concern in a number of cases IMO. The feeling I get, not being familiar with most of those funds, is that in some cases they can levy a heavy performance fee - such as BAF showing over a 9% OCF+performance fee.
I'm guessing that, for instance, as the S&P500/US had a great year that they get a nice performance fee as a result. Which could just be a reflection of high volatility. Stocks down -40% one year, no performance fees for the manager, next year stocks up +67% and perhaps +6.7% performance fee paid to the fund manager. A round trip in gross stock compound gain terms, 0% overall investor benefit across those two years, less -6.7% performance fee to the fund manager for 'having done so well' in the second year, leaving the actual investors down at 93.3% overall.
On that basis a fund manager interested in maximising the lining of their own pockets might look to maximise volatility, and believe that BAF does so to net gearing of 60% levels.
Return to “High Yield Shares & Strategies - General”
Who is online
Users browsing this forum: monabri and 21 guests