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Thread: Quick question re fund managers

  1. #1
    Grand Master learningtofly's Avatar
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    Quick question re fund managers

    Sorry if this is a stupid question, but do fund managers normally charge a flat fee, or is is generally based on performance? if the latter, what would happen if there was on overall loss over a reporting period?

    Many thanks.

  2. #2
    Think some pay themselves a performance fee if certain targets are met (for example, 15% if over 10%). This on top of flat fee.

  3. #3
    Never found one that worked on a percentage of gains, which is telling. There tends to be a flat fee (1% is typical) which is payable even if they lose you money - which they frequently do.

  4. #4
    Master kaiserphoenix's Avatar
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    Hedge funds and private equity funds tend to have this “performance” element. Generally speaking if the fund is “active” ie trying to beat the benchmark index instead of just tracking it the fees tend to be much higher. Personal opinion i would never instead in actively managed funds.


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  5. #5
    Grand Master learningtofly's Avatar
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    Thanks guys - just what I needed.

    SWMBO has a reasonable sum in managed fund with a guy over in Switzerland. He acts for her family and has done for years, but all seems fine. (He’s on a flat fee with no performance element.)

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