Fee Illustration
Calculation
| Particulars | Values | ||
|---|---|---|---|
| i | Capital Contributed / Assets under Management | i = a | ₹10.00 |
| ii | Gain / (Loss) on Investment based on the Scenario | ii= i*g | ₹0.10 |
| iii | Gross Value of the Portfolio at the end of the year | iii= i + ii | ₹10.10 |
| iv | Average Assets Under Management | iv= (i + iii) / 2 | ₹10.05 |
| v | Other Expenses | v= iv x c | ₹0.00 |
| vi | Brokerage and Transaction cost | vi= iv x f | ₹-0.10 |
| vii | Management Fees | vii = (iv + v + vi) x b | ₹-0.10 |
| viii | Total Charges Before Performance Fee | viii = v + vi + vii | ₹-0.20 |
| ix | Gross Value of the Portfolio before Performance fee | ix = iii + viii | ₹9.90 |
| x | High Water Mark Value (HWM) (Capital contributed for 1st year and second year onwards as defined in the PMS agreement. | ₹10.00 | |
| xi | Hurdle Rate of return or as defined in the PMS agreement | xi = i x e | ₹0.10 |
| xii | Gross Value of the Portfolio before Performance fee is greater than High Water Mark Value + Hurdle rate of return | xii = ix > (x+xi) then Yes else No P Fees | No |
| xiii | Portfolio return subject of Performance Fee | xiii = ix – x – xi | ₹0.00 |
| xiv | Performance Fee | xiv = xiii x d | ₹0.00 |
| xv | Net value of the Portfolio at the end of the year after all fees and expenses | xv = ix + xiv | ₹9.90 |
| xvi | % Portfolio Return | xvi = ((xv – i) / i) % | -1.00% |
| xvii | High Water Mark to be carried forward for next year. When performance fee is charged from the portfolio itself. | xvii = Max (x , xv) | ₹10.00 |
| xvii | High Water Mark to be carried forward for next year. When performance fee is paid separately by the investor to the PM. | xvii = Max (ix , x) | ₹10.00 |
Notes:
- Management Fee is assumed to be charged annually in the illustration. However, it can be charged at any frequency (Daily, Monthly, Quarterly, Semi-annually, Annually) as defined in the PMS agreement and permitted under SEBI regulations.
- Management Fee can be based on Average portfolio value or closing portfolio value, or other methods as defined in the PMS agreement.
- Returns are assumed to be generated linearly throughout the year.
- Other Expenses include Account Opening charges, stamp duty, Audit Fee, Bank charges, Fund Accounting charges, Custody Fee, demat charges, or other miscellaneous expenses.
- Brokerage and transaction costs are illustrated based on Average AUM but are charged on actual trades.
- All Fees and charges are subject to GST.
- High Water Mark for the 1st Year is the Capital invested. For subsequent years, it is the year-end closing value after all charges and fees, unless otherwise defined in the PMS agreement.
- Hurdle Rate is calculated based on the Higher of (HWM or previous year closing capital), but may differ as per the PMS agreement.
- Hurdle Rate is prorated if the performance fee period is less than 1 year or if there are inflows/outflows from the portfolio.
- This illustration shows High Water Mark carry forward scenarios for fair treatment of the investor.
- This is a generic illustration; each portfolio manager may modify it as per their PMS agreement terms and conditions.
- Portfolio Managers should also refer to the illustrations in Annexure 4A of the Master Circular for Portfolio Managers dated June 07, 2024.
