Fee Structure

Performance Fee Calculation

The 2% Management fee is realized by ForexAtom when any kind of deposit is made by the client to their ForexAtom Managed Accounts. The performance fees are taken on a high watermark basis. A high watermark is the previous high in the participant's account (adjusted for deposit and withdrawals). It ensures that the fees only get deducted based on new performance, rather than just recovery of poor performance. In other words, if an account loses money over a period, the account must first recoup previous losses and then any profit above the high watermark is subject to a performance fee.

As an example: The account starts with $50,000 initially. At the end of the first month, it makes $3,000 bringing the equity to $53,000, on which the performance fee of 20%, or $600, is deducted. Then, at the end of the second month, it loses $4,000 bringing the equity to $49,000, on which no performance fees are charged. At the end of the third month, it makes $2,000 bringing the equity up to $51,000, on which no performance fees are charged since the previous watermark was not reached. Lastly, at the end of the fourth month, the account makes $3,000, bringing the equity to $54,000, which is a new equity high by $1,000 over the watermark of $53,000 in the first month, on which the performance fee of 20%, or $200, is deducted.

The performance fees are thus influenced by the exact date when the account opens. Hence, participants who enter into the accounts on different dates will have different watermarks. Watermarks are based on the actual returns and date of entry for each account, thereby resulting in different watermarks for different accounts. Since account returns will vary based on the open date, the performance fees are calculated separately for each account.