Innovative
Fee Structure for Equity Portfolio
In 2002 Avenue Investment
Management began to offer its private
wealth management clients an innovation in wealth management;
relevant and fair management fees.
Our innovative fee structure is founded
in our belief that fees charged by investment managers to investors
should be both relevant to performance and fair for all.
Because of this belief we remain committed to offering our
clients an innovative fee structure based on three straight-forward
principals:
Guiding Principles behind Innovative Fee Structure
- Fees should be appropriate for
all:
The Avenue Total Return Equity Portfolio has a management fee of 1.5%
of assets under management.
Note: For those client accounts under $500,000 the Avenue Total Return Equity Portfolio
management fee is 2.0% of assets under management.
- Fees should be reduced if the investment
manager does not make you money:
If our client’s absolute return
is not positive over the calendar year, the management fee is
cut in half or reduced from
1.5% to 0.75%.
- Fees should reward an investment manager that does make you money:
If
our client’s annual return exceeds 10% over the calendar year,
in addition to the management fee payable, Avenue Investment
Management also will receive a performance fee equal to 10% of
the excess return for that calendar year.
Note
however, that this performance fee is also capped to a maximum
of 1%.
Example: Portfolio return is 14%. Avenue
Investment Management receives 10% of the 4% excess, which equals
40 basis points.
This is in addition to the management fee that
is payable to Avenue Investment Management.
Example of Innovative Fee Structure
| |
| Year |
Example |
Management |
Performance |
Total |
| |
Returns |
Fee* |
Fee** |
Fee |
| 2008 |
-35% |
0.75% |
0.00% |
0.75% |
| 2007 |
10% |
1.50% |
0.00% |
1.50% |
| 2006 |
17% |
1.50% |
0.70% |
2.20% |
| 2005 |
24% |
1.50% |
1.00% |
2.50% |
| 2004 |
15% |
1.50% |
0.50% |
2.00% |
* Charged in the following calendar year (quarterly in arrears) ** Charged after calendar year that performance is achieved
Displayed investment returns are hypothetical and should not be construed as a forecast or projection of expected returns. Past performance does not guarantee future investment returns. Displayed returns are the unaudited returns of the S&P/TSX 2004-2008. The Management Fee listed is for an Avenue Total Return Equity Portfolio of greater than $500,000. |
Benefits of the Equity Portfolio Performance Fee:
- Interests of client and Avenue Investment Management are aligned
- Fair and relevant fees as compared to competing investment managers
or investments
- No deferred sales charges or front-load fees apply
- Management fees are tax deductible
|
