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Performance Fees

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Five features of a fair performance fee, including a holiday

Most investors pay little attention to the performance fee on their fund but it can have a material impact on returns, especially if the structure is unfair. Check for these features and a coming fee holiday.

Find a 'sweet spot' rather than complexity

Chasing higher market returns inevitably comes with higher risk, but is there a portfolio 'sweet spot' that accepts some risk in exchange for better performance, while keeping fees under control?

Fairer performance fees for limited-capacity managers

Big super funds are often crowded out from microcap opportunities due to limited capacity, leaving an opportunity for smaller funds and other investors provided the performance fees are fair.

Investors should tap strengths of service providers

Every investor deals with a range of service providers, but it's important to know the strengths and weaknesses of each and tap their capabilities accordingly.

Understanding LIC fee structures

Fee structures of LICs can vary greatly. Higher fees impact on net returns and make beating benchmarks more difficult. On the other hand, expect manager skill and outperformance to come at a higher cost.

The long and short of hedge funds, Part 2

Part 2 focusses on the criticisms that are often levelled at hedge funds and how to manage these disadvantages to your level of tolerance. The challenge for the hedge fund industry is to deliver more retail-targetted products.

Watch the performance of performance fees

Paying a high performance fee must be a good problem to have, as it must mean the fund manager has delivered outstanding performance, right? It's not always the case, and it pays to know how the fee is calculated.

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Australian stocks will crush housing over the next decade, one year on

Last year, I wrote an article suggesting returns from ASX stocks would trample those from housing over the next decade. One year later, this is an update on how that forecast is going and what's changed since.

Avoiding wealth transfer pitfalls

Australia is in the early throes of an intergenerational wealth transfer worth an estimated $3.5 trillion. Here's a case study highlighting some of the challenges with transferring wealth between generations.

Taxpayers betrayed by Future Fund debacle

The Future Fund's original purpose was to meet the unfunded liabilities of Commonwealth defined benefit schemes. These liabilities have ballooned to an estimated $290 billion and taxpayers continue to be treated like fools.

Australia’s shameful super gap

ASFA provides a key guide for how much you will need to live on in retirement. Unfortunately it has many deficiencies, and the averages don't tell the full story of the growing gender superannuation gap.

Looking beyond banks for dividend income

The Big Four banks have had an extraordinary run and it’s left income investors with a conundrum: to stick with them even though they now offer relatively low dividend yields and limited growth prospects or to look elsewhere.

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The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
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