High-Water Mark Performance Fee Explained
The High-Water Mark Performance Fee is a transparent and fair method that ensures investors only pay fees on new profits. This protects traders from double-charging and aligns the manager’s success with yours.
How the High-Water Mark Works
Suppose you invest $500,000. After one month, the balance grows to $575,000 – a profit of $75,000. A performance fee is charged only on this profit (for example, 20% of $75,000 = $15,000).
In the following month, the account drops to $460,000. No fee is charged on recovery until the balance exceeds the previous high-water mark of $575,000. This ensures fairness by avoiding fees on recovered losses.
Why the High-Water Mark Performance Fee Matters
The High-Water Mark Performance Fee protects investors from excessive charges and builds trust. Asset managers only profit when you reach new highs. This makes it one of the most investor-friendly models in the trading and hedge fund industry.
To learn more about how we apply this fee structure in practice, see our Copy Trading Info and Approved Brokers sections.