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Fair Fee Investing

As active fund managers, we at Equitile believe fees should encourage the best possible investment practice and foster a healthy alignment of interests between ourselves and our clients. We don't believe you should pay for something you don’t get.

It’s why we developed a unique performance-oriented fee-model. We charge sufficient management fees to cover our ongoing costs, beyond that level we charge only performance based fees. In practice this means the Equitile Resilience Fund charges a management fee of 0.7% of assets under management, but this fee is charged only on £350million of assets in the Fund. Assets above £350m in the Fund incur no management fee, instead they are charged a performance fee of 10% of returns above the high-water mark.

Some questions you might ask

Will I pay to subscribe?

No - our aim is to deliver excellent returns to our investors after fees. If you pay to subscribe, then our job is already harder from the start.

Equitile does not charge subscription fees.

Will I pay extra if I want to leave the Fund?

No – We want you to stay invested because you are happy with your returns, not because it might cost you to leave.

Equitile does not charge redemption fees.

Why are fees not simply a fixed percentage of all assets in the Fund?

If we charged only a fixed percentage of assets in the Fund, as is normal industry practice, then we would be incentivised to maximise the assets in the Fund rather than deliver good investment returns. But as an investor you want the best possible combination of risk and return, which is what our performance-related fee model is designed to promote. The costs of running a fund are finite and so, once these costs are covered, there are growing economies of scale. Unless you are seeing positive returns, you should only pay to keep your manager stable through good and tough periods.

Equitile caps management fees once the Fund reaches a size at which all its running costs are covered.

What are the drawbacks of performance fees?

If performance fees are layered on top of management fees, the total fee level can become too high for the investor and the manager may be incentivised to take too much investment risk. For this reason, the Equitile fee model does not layer performance fees on top of management fees and we do not use leverage in our investment strategy.

Equitile uses performance fees to align our interests with our clients.

Why do you describe this fee model as fair?

This fee model ensures Equitile can provide our clients with a stable investment management service through good times and bad. By capping our management fees, however, we share our economies of scale with our clients, who enjoy falling fixed costs as our business grows. At the same time, as assets grow, our fees become increasingly reliant on investment returns.

Do all unit holders pay the same fee?

Yes – As a unit holder you’ll pay the same blended fee as all other unit holders in the Fund.

Fees for the Equitile Resilience Fund adapt from being a standard fund management fee to a performance orientated fee as the Fund’s assets under management increase beyond £350 million.

Should performance be calculated against a benchmark?

No – Clients should expect the best performance possible and expect us to invest according to our principles, not against a benchmark. We do, of course, expect clients to choose the benchmark most relevant to them when judging our performance.

Equitile only charges performance fees when all investors are making positive returns i.e. the Fund’s net asset value is above the high-water mark.

Is the high-water mark ever reset?

No – We don’t believe that we should be forgiven for bad performance. If your investment falls in value, we should make that back before being allowed to charge a performance fee.

Equitile never resets the high-water mark.

Will I be paying for third-party research out of my assets?

No – We do our own investment research. We believe this is the best way to give our clients a competitive advantage.

Equitile does not use or pay for third-party research.

What about trading costs?

Our Fund is an actively managed fund . We aim to adapt the fund’s investment to the changing business environment but we only trade when we believe the Fund will benefit.

Equitile uses execution only brokers when trading on behalf of the Fund.

Are there other costs?

Yes – all funds must pay external service providers such as the custodian, administrator and auditor.

Total ongoing charges can be found in the Key Investor Information Document.

Would this be a good model for the active management industry?

We believe an investment management industry more reliant on fees linked directly to investors' returns would act more responsibly, be less willing to fund asset price bubbles and foster a more stable financial system.


 

 

 

Fair Fee Investing

At Equitile we believe fees should encourage the best possible investment practice and foster a healthy alignment of interests between ourselves and our clients. We believe clients shouldn’t pay for something they don’t get.

 

It’s why we have developed a unique performance-oriented fee-model. We charge enough management fees to cover our ongoing costs, beyond that level we charge only performance based fees. In practice this means the Equitile Resilience Fund charges a management fee of 0.7% of assets under management, but this fee is charged only on the first £350million of assets in the fund. Assets above £350m in the fund incur no management fee, instead they are charged a performance fee of 10% of returns, over and above a high-water mark.

This fee model ensures Equitile can provide our clients with a stable investment management service through good times and bad. It also means we are always incentivised to generate the best possible combination of returns and risk for our investors. We are not incentivised to grow the fund to a point where the assets under management start to hamper good investment returns.  

For us it’s a matter of fairness. By capping our management fees, we share our economies of scale with our clients, who enjoy falling fixed costs as our business grows. At the same time, as assets grow, our fees become increasingly reliant on investment returns.

 

We believe an investment management industry more reliant on fees linked directly to investor returns would act more responsibly, be less willing to fund asset price bubbles and foster a more stable financial system.

 

Some questions you might ask;

Will I pay to subscribe?

No - Our aim is to deliver excellent returns to our investors after fees. If you pay to subscribe, then our job is already harder from the start.

Equitile does not charges subscription fees.

Will I pay extra if I want to leave the Fund?

No – We want you to stay invested because you are happy with your returns, not because it might cost you to leave.

Equitile does not charge redemption fees.

Why are fees not simply a fixed percentage of all assets in the fund?

If we charged only a fixed percentage of assets in the fund, as is normal industry practice, then we would be incentivised to maximise the assets in the fund rather than deliver good investment returns. But as an investor you want the best possible combination of risk and return, which is what our performance-related fee model is designed to promote. The costs of running a fund are finite and so, once these costs are covered, there are growing economies of scale. Unless you are seeing positive returns, you should only pay to keep your manager stable through good and tough periods.

Equitile caps management fees once funds reach a size at which all our running costs for the fund are covered.

What are the drawbacks of performance fees?

If performance fees are layered on top of management fees the total fee level can become too high and unfair for the investor and the manager may be incentivised to take too much investment risk. For this reason, the Equitile fee model does not layer performance fees on top of management fees and we do not use leverage in our investment strategy.

Equitile uses performance fees to align interests between ourselves and our clients.  

Do all unit holders pay the same fee?

Yes – As a unit holder you’ll pay the same blended fee as all other unit holders in the Fund.

Fees for the Equitile Resilience Fund adapt from being a standard fund management fee to a performance orientated fee as the Fund’s assets under management increase beyond £350 million.

Should performance be calculated against a benchmark?

No – Clients should expect the best performance possible and expect us to invest according to our principles, not against a benchmark. We do, of course, expect clients to choose the benchmark most relevant to them when judging our performance.

Equitile only charges performance fees when all investors are making positive returns i.e. the Fund’s Net Asset Value is above the high-water mark.

Is the high-water mark ever reset?

No – We don’t believe that we should be forgiven for bad performance. If your investment falls in value, we should make that back before being allowed to charge a performance fee.

Equitile never resets the high-water mark.

Will I be paying for third-party research out of my assets?

No – We do our own investment research. We believe this is the best way to give our clients a competitive advantage.

Equitile does not use or pay for third-party research.

What about trading costs?

Our fund is an actively managed fund . We aim to adapt the fund’s investment to the changing business environment but we only trade when we believe the fund will benefit.

Equitile uses execution only brokers when trading on behalf of the fund.

Are there other costs?

Yes – all funds must pay external service providers such as the custodian, administrator and auditor.

Equitile’s total Ongoing Charges can be found on the Key Investor Information Document.

 

Fair Fee Investing

At Equitile we believe fees should encourage the best possible investment practice and foster a healthy alignment of interests between ourselves and our clients. We believe clients shouldn’t pay for something they don’t get.

 

It’s why we have developed a unique performance-oriented fee-model. We charge enough management fees to cover our ongoing costs, beyond that level we charge only performance based fees. In practice this means the Equitile Resilience Fund charges a management fee of 0.7% of assets under management, but this fee is charged only on the first £350million of assets in the fund. Assets above £350m in the fund incur no management fee, instead they are charged a performance fee of 10% of returns, over and above a high-water mark.

This fee model ensures Equitile can provide our clients with a stable investment management service through good times and bad. It also means we are always incentivised to generate the best possible combination of returns and risk for our investors. We are not incentivised to grow the fund to a point where the assets under management start to hamper good investment returns.

For us it’s a matter of fairness. By capping our management fees, we share our economies of scale with our clients, who enjoy falling fixed costs as our business grows. At the same time, as assets grow, our fees become increasingly reliant on investment returns.

 

We believe an investment management industry more reliant on fees linked directly to investor returns would act more responsibly, be less willing to fund asset price bubbles and foster a more stable financial system.

 

Some questions you might ask;

Will I pay to subscribe?

No - Our aim is to deliver excellent returns to our investors after fees. If you pay to subscribe, then our job is already harder from the start.

Equitile does not charges subscription fees.

Will I pay extra if I want to leave the Fund?

No – We want you to stay invested because you are happy with your returns, not because it might cost you to leave.

Equitile does not charge redemption fees.

Why are fees not simply a fixed percentage of all assets in the fund?

If we charged only a fixed percentage of assets in the fund, as is normal industry practice, then we would be incentivised to maximise the assets in the fund rather than deliver good investment returns. But as an investor you want the best possible combination of risk and return, which is what our performance-related fee model is designed to promote. The costs of running a fund are finite and so, once these costs are covered, there are growing economies of scale. Unless you are seeing positive returns, you should only pay to keep your manager stable through good and tough periods.

Equitile caps management fees once funds reach a size at which all our running costs for the fund are covered.

What are the drawbacks of performance fees?

If performance fees are layered on top of management fees the total fee level can become too high and unfair for the investor and the manager may be incentivised to take too much investment risk. For this reason, the Equitile fee model does not layer performance fees on top of management fees and we do not use leverage in our investment strategy.

Equitile uses performance fees to align interests between ourselves and our clients.  

Do all unit holders pay the same fee?

Yes – As a unit holder you’ll pay the same blended fee as all other unit holders in the Fund.

Fees for the Equitile Resilience Fund adapt from being a standard fund management fee to a performance orientated fee as the Fund’s assets under management increase beyond £350 million.

Should performance be calculated against a benchmark?

No – Clients should expect the best performance possible and expect us to invest according to our principles, not against a benchmark. We do, of course, expect clients to choose the benchmark most relevant to them when judging our performance.

Equitile only charges performance fees when all investors are making positive returns i.e. the Fund’s Net Asset Value is above the high-water mark.

Is the high-water mark ever reset?

No – We don’t believe that we should be forgiven for bad performance. If your investment falls in value, we should make that back before being allowed to charge a performance fee.

Equitile never resets the high-water mark.

Will I be paying for third-party research out of my assets?

No – We do our own investment research. We believe this is the best way to give our clients a competitive advantage.

Equitile does not use or pay for third-party research.

What about trading costs?

Our fund is an actively managed fund . We aim to adapt the fund’s investment to the changing business environment but we only trade when we believe the fund will benefit.

Equitile uses execution only brokers when trading on behalf of the fund.

Are there other costs?

Yes – all funds must pay external service providers such as the custodian, administrator and auditor.

Equitile’s total Ongoing Charges can be found on the Key Investor Information Document.

 

 

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