Fee calculation
Two of the distinguishing characteristics of the RTFX Forex Asset Management Service fee structure are: - Its attractiveness- the high water mark level
RTFX will only earn its performance forex commission of between 30% and 40% on the excess above the 4% quarterly performance benchmark, if such minimum performance benchmark is achieved.
RTFX also applies a high water mark (or “loss carry-forward provision”) to its performance forex commission calculation. This means that RTFX charges a performance forex commission only on the performance in excess of the cumulative 4% benchmark it has previously achieved on your investment.
This is better understood by use of the following examples based on an initial deposit of €10’000:
| Period | Ref. Amt (Eur) | Benchmark | P&L (Eur) | P&L % | Acc. P&L | High Water Mark Level | Perf. Forex Commission % | Perf. Forex Commission (Eur) | Net Acc. P&L (Eur) |
|---|---|---|---|---|---|---|---|---|---|
| 01/01/10 – 31/03/10 | 10’000.00 | 4.00% | -1’153.80 | -11.5380% | -11.5380% | 0.00% | 0.00% | 0.00 | -1’153.80 |
| 01/04/10 – 30/06/10 | 10’000.00 | 4.00% | +1’257.62 | +12.5762% | +1.0382% | +1.0382% | 0.00% | 0.00 | +103.82 |
| 01/07/10 – 30/09/10 | 10’103.82 | 4.00% | +3’028.93 | +29.9781% | +31.0163% | +31.0163% | 10.3912% | 1’049.91 | +2’082.84 |
| 01/10/10 – 31/12/10 | 12’082 | 4.00% | +524.22 | +4.3386% | +35.3549% | +35.3549% | 0.1354% | 16.36 | +2’590.92 |
| 01/01/11 – 31/03/11 | 12’590.92 | 4.00% | -641.88 | -5.0980% | +30.2569% | +35.3549% | 0.00% | 0.00 | +1’949.04 |
| 01/04/11 – 30/06/11 | 12’590.92 | 4.00% | +629.55 | +5.0000% | +35.2569% | +35.3549% | 0.00% | 0.00 | +2’578.59 |
- If during your 1st Quarter, you register a negative performance of -11.538% on your initial investment of €10’000, no performance forex commission will be payable since the 4% minimum benchmark for that quarter period would not have been achieved and your loss is carried forward.
- If during your 2nd Quarter, your register a performance of +12.5760% on your reference investment of €10’000, still no performance forex commission will be payable, since the negative performance of the 1st quarter would need to be first considered prior to any performance forex commission being payable.
- If during your 3rd Quarter, you register a performance of +29.9781% on your reference investment of €10’103.82, a performance forex commission equal to 10.3912% (that is, 40% of the excess above €404.15 [4% benchmark on reference investment of €10’103.82] [€3’028.93 - €404.15 = €2’624.78 x 40% = €1’049.91]) would be payable.
- If during your 4th quarter, your register a performance of +4.3386% on your reference investment of €12’082.84, a performance forex commission equal to 0.1354% (that is, 40% of the excess above €483.31 [4% benchmark] [€524.22 - €483.31 = €40.91 x 40% = €16.36]) would be payable.
- If during your 5th quarter, your register a negative performance of -5.0980% on your reference investment of €12’590.92, no performance forex commission will be payable, since the 4% minimum benchmark for that quarter period would not have been achieved.
- If during your 6th quarter, your register a performance of 5.00% on your reference investment of €12’590.92, still no performance forex commission will be payable, since the previous high water mark level would not have been exceeded.
In essence, RTFX includes, within its performance forex commission calculation, any negative performance from previous quarters prior to earning any performance forex commission. This directly links the interests of RTFX with yours as our esteemed client. We only earn income if you profit above a minimum benchmark performance!
