New York (HedgeCo.Net) – One of the best things about the fee comparison tool is that it allows you to adjust the GAR to show the difference in fees at different return levels. Because of the incentive fee of 20%, the higher the return, the greater the difference between the two fee structures. As an example, the image below shows the fee differentials with a 10% GAR. Under this example, the annual fee for the traditional fund structure goes up to $36,000 for the year and the fee for the HedgeCoVest platform remains constant at $25,000. The net return for the platform is now $75,000 while the return for the hedge fund is now $64,000. The amount saved over a ten-year period jumps to $129,839.96.
At HedgeCoVest, we felt like fees were one of the biggest issues that kept investors from investing in hedge funds and thus a reason to develop the platform. The strategies themselves should be implemented by most investors with a portion of their portfolio, but with the amount of fees being assessed, most investors were hesitant to invest in hedge funds. With the HedgeCoVest platform, that hurdle is removed and it can lead to a huge difference in returns and money saved over time.
One of the tools available at HedgeCoVest is a calculator that shows the difference in fees paid under a traditional hedge fund fee structure with a 2% management fee and a 20% incentive fee versus the flat 2.5% fee assessed on our platform. You can adjust the gross annual return (GAR) to see how much of a difference the fees can make. As an example, the following image shows the calculator using a GAR of 8%. With a $1 million account, the annual fee on HedgeCoVest would be $25,000 and the fees under the traditional fee structure would be $32,000, leaving you the investor with a net return of $55,000 on our platform versus a net return of $48,000 from the hedge fund.
With a GAR of 8%, over a ten-year period, the difference between the two fee structures would save you $76,871.26 in fees.
One the best things about the fee comparison tool is that it allows you to adjust the GAR to show the difference in fees at different return levels. Because of the incentive fee of 20%, the higher the return, the greater the difference between the two fee structures. As an example, the image below shows the fee differentials with a 10% GAR. Under this example, the annual fee for the tradtional fund structure goes up to $36,000 for the year and the $25,000 for the HedgeCoVest platform remains constant at $25,000. The net return for the platform is now $75,000 while the return for the hedge fund is now $64,000. The amount saved over a ten-year period jumps to $129,839.96.
Just for good measure, here is a third example and this time we are using a 12% GAR. Now we see the hedge fund fee for one year is $40,000 while the net return for HedgeCoVest jumps to $90,000 and the net return for the hedge fund moves up to $80,000. The ten-year fee savings jumps to $190,455.23. A huge amount for ten years, especially when that is money that stays in your account.
We encourage you to give it a try. You can click on any of the three images to try it out, or you can click here. Don’t let high fees keep you from using hedge fund strategies. The HedgeCoVest platform can provide those strategies and save you hundreds of thousands in fees.
