Allentown Morning Call – Critics of mutual funds have long maintained that one big problem with the entire investment genre is that the money manager gets paid even when the fund falls short of expectations.
So while management can talk about what it is doing to make money, the truth is that shareholders pay whether the fund delivers or not.
But a brand new fund has put a twist on that proposition, creating a fee structure that actually could leave management getting absolutely nothing if it can’t deliver expected results. While this type of compensation structure  known as a performance fee  is hardly a new idea, seeing it done to the extreme should make investors wonder why it’s not more widely available.
Moreover, it might have them looking at funds with similar performance fees.
To see why that is, let’s examine the new TFS Small Cap fund (ticker TFSSX), the second offering run by TFS Capital Management of Richmond, Va.
TFS is best known for hedge funds, although it has a market-neutral mutual fund that has done well throughout its 18-month history.
