Tuesday, January 4, 2011

Performance Fee

A performance fee is a charge that goes to the fund manager if the performance of the portfolio exceeds certain targets. For example a fund manager might receive a bonus fee of 20% of the performance above the benchmark. For most retail investment products the charging of a performance fee is relatively rare, but it is common practice amongst hedge funds.

Synonyms: Performance bonus, Out-performance fee, Variable fee

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If you have any further questions or would like to add to this fund management term, then please submit your thoughts below.

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