WAY Client-centred Performance Fees
New specialist funds aligned with investor interests...
A radical new charging structure offering a 'No win, no/low fee' approach to delivering performance to investors...
There have been attempts over the years to align the interests of investors with those of the fund companies managing funds for them. This has generally been manifested in modest fixed charges supplemented by the addition of performance fees. WAY Fund Managers has adopted a radical new approach which changes all the rules so that investors genuinely do benefit from the success of the managers but do not suffer penal charges when their invested funds either go backwards or simply grow at a modest rate - neither of which should be rewarded.
The new WAY approach taken on the WAY Absolute Return Portfolio Fund, the WAY Asian Spice Portfolio Fund and the WAY Freestyle Growth Portfolio Fund is to:
- Levy a nil or modest fixed rate charge which only defrays some of the unavoidable costs of administering a fund
- Imposes a performance fee but only once the underlying fund has achieved some worthwhile performance each year above an absolute hurdle (5% for Absolute Return and 10% for Asian Spice and Freestyle)
- Performance fee rates start modestly and only once gross returns exceed a worthwhile threshold do they escalate so that rich rewards match rich returns.
'No win, low fee' approach to delivering performance to investors
The above chart shows the level of the combined charges relative to the performance of the underlying fund each year. The fees for the WAY Absolute Return Portfolio Fund are levied from a lower base because the objective of the fund is to deliver consistent risk-adjusted absolute returns at a modest level. In this instance a consistent 10% gross return would incur total charges of 1% per annum. The WAY Asian Spice Portfolio Fund and the WAY Freestyle Portfolio Fund are also designed to enjoy an attractive gross return - but in this case of 20% per annum - before the underlying fees reach that same 1%.
Retail share classes of these funds incorporate an additional 0.5% annual charge which is then paid out to advisers as trail commission.
The funds have been designed to incorporate a fee tariff which is geared towards the interest of investors. As nearly as is possible (subject to a 0.5% per annum administration charge on two of the funds) there is a 'no gain, no fee' policy to protect investors when the funds fail to deliver worthwhile returns.
1. Data & Statistics - WAY Fund Managers Limited
(Downloadable) details of WAY Client-centred: Performance Fees
WAY Fund Managers' fund launch: Press Release
The price of shares and the income from them can go down as well as up as a result of changes in the value of the underlying investments and currency movements. An investor may not get back the amount originally invested. Past performance is not necessarily a guide to future returns.