The charges associated with a Money Manager's services are collectively known as an offer. Whether you're a Money Manager or an Investor, it's crucial to understand these fees and their variations.
A PAMM Money Manager can choose to apply all three fees in their offer or combine them as desired. The following screenshots are taken from the perspective of a PAMM Money Manager.
Before deciding to join a PAMM Fund, PAMM Investors should review the offer set by the Money Manager to ensure they agree with the proposed rates. Once funds are invested, offer fees cannot be refunded.
This fee applies to every deposit made into the fund, including the initial investment.
Deposits up to $1000 incur an 8% fee, while deposits of $1000 or more carry a 5% charge.
The management fee is based on the equity (amount invested) of the Investor and is assessed for overseeing their funds.
In the example provided, deposits up to $500 would incur a $35 fee, while deposits exceeding $500 would have a $20 cost.
The performance fee is determined by the profit return generated by the Money Manager's trading. It may be divided into tiers, with varying percentages used to calculate the fee. Only percentages are utilized for charging this fee.
Suppose there is $500 in the Fund reserve. If the Manager generates a 30% profit ($150), the Investor would be charged a 12% fee. Any profit exceeding 30% would result in a 15% fee for the Investor ($150+).
- A PAMM Money Manager establishes a PAMM Fund and sets an offer with a 10% Deposit fee.
- 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.
- The PAMM Fund (pool of funds) now holds $9000. The PAMM Manager begins trading and generates a $4000 profit, of which 60% ($2400) is allocated to Investor 1 and 40% ($1600) to Investor 2.
- The PAMM Money Manager's profit from the Deposit fees is $1000. PAMM Investor 1's profit is $2400. PAMM Investor 2's profit is $1600.