The performance fee is equal to 15% of the outperformance of the Trend against the MSCI World Net Total Return ex Australia Index (in Australian dollars), subject to a ‘high water mark’. The high water mark ensures the performance fee is only ever payable if all these conditions are met:
(a) the Trend performs better than the Index; and
(b) there is a positive return since the last performance fee was paid.
Performance based fee - example calculation
For example only, if the Trend increases 10% in value over the year and the Index is up 7% for the same period, the Trend has outperformed by 3%. If you invested $1,000 then your investment would be worth $1,100 after a year. The outperformance is $30 (being 3% of $1,000) so the performance fee payable to AtlasTrend is $4.50 (being 15% of $30).