Multi Manager performance fee.

An incentive to perform

We’ve created a performance fee with the aim of maximising your money's potential.

It's a clear incentive for us to

• Constantly try to better the market.
• Beat our past performance.

How does the performance fee work?

• We charge a lower fixed annual management charge than most of our competitors. So if the fund doesn't perform you pay lower fees than the competition.
• The performance fee is only paid when the fund outperforms the benchmark.
• We’ve selected standard Investment Management Association (IMA) sector averages as the funds' benchmark – the IMA is an independent trade body for the UK investment industry, so the fee is fair.
• Our Multi Manager Income Fund, for example, is benchmarked against the IMA Mixed Investment 20-60% Shares Sector, which averages the performance of every Mixed Investment 20-60% fund in the UK – so you can be sure the benchmark represents the entire sector.

The performance fee varies depending on how much the fund outperforms the benchmark. It's capped at 1% of the fund value in each accounting year.

A full explanation can be found in the Multi Manager Key Information document in the right hand column.

What’s the high water mark?

The high water mark is the highest level of outperformance reached by the investment fund and it sets a target for how the fund must perform in the future. If the fund outperforms its previous target then the high water mark increases again. It’s reassuring for you because the fund manager won’t get paid for poor performance. If the fund does under-perform then the fund manager must get the investment fund above the high water mark before the performance fee can be taken again.

What happens to the performance fee in a falling market?

The performance fee can still be paid even if the value of the fund falls, as long as the fund is still outperforming the benchmark. The diagram and explanation below show you how the performance fee and high water mark work in practice.