A Money Manager's costs for his services are collectively referred to as an offer. Whether you are a Money Manager or an Investor, it's critical to comprehend the fees and how they differ.
A PAMM Money Manager can apply all three fees to their offer or a mix of them if they desire. Screenshots in this guide are taken from the PAMM Money Manager perspective.
PAMM Investors would need to check the offer set for the PAMM Fund before deciding to join to check if they agree with the Money Manager's proposed rates. No refunds in offer fees can be made once a fund is invested.
Deposit Fee
Every single deposit made into the fund is subject to this fee, even the initial investment.
Deposits up to $1000 are subject to an 8% fee, while deposits of $1000 or more are subject to a 5% cost.
Management Fee
This fee, which is based on the equity (amount invested) of the Investor, is assessed for managing their funds.
In the above example, a $35 fee will be applied to deposits up to $500 and a $20 cost would be applied to deposits over $500.
Performance Fee
This fee is determined by the amount of profit return that the Money Manager may produce from their trading. Accordingly, this section may be divided into tiers, with price variations expressed as percentages. Only percentages may be used to charge for this.
Say we have $500 in the Fund reserve. A 12% fee would be applied to the Investor in the event that the Manager generates a 30% profit ($150). The investor will be charged 15% of any profit that exceeds 30% ($150+).
Practical example:
PAMM Money Manager creates PAMM Fund and sets a certain offer within this Fund (Deposit fee is 10%).
Investor 1 invests ($6000-10% Deposit Fee ($600)= $5400) $5400 (60%) in this Fund.
Investor 2 invests ($4000-10% Deposit Fee ($400)= $3600) $3600 (40%) in this Fund.
This PAMM Fund (pool of funds) has $9000 now. PAMM Manager starts trading and makes a $4000 profit which 60% ($2400) will be allocated to Investor 1 and 40% ($1600) to Investor 2.
PAMM Money Manager's profit is $1000 from the Deposit fees.
PAMM Investor 1's profit is $2400.
PAMM Investor 2's profit is $1600.
