Average Fees Fund Of Hedge Funds
Hedge funds are a form of investment fund that invests into a various types of investments such as shares, debentures and also commodities. The fees charged for hedge funds investment is management fees and also performance fees. |
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The management fee is calculated as a certain percentage on the net asset value of the fund. This percentage ranges from 1 percent to 4 percent, with the standard percentage being 2 percent. Usually, management fees are paid on a monthly or quarterly basis.
Performance fees are a percentage of the fund's profits, and this amount is calculated on both the realized as well as unrealized profits. The normal performance fees percentage is 20 percent. Managers who are more experienced charge higher than this normal percentage.
Currently, there is a reduction in hedge fees percentages. Less than 40 percent of fund managers continued to charge the usual 2 percent management fees and 20 percent performance fees. At the end of 2009, it was reported that the average management fee charged was 1.65 percent, and the average performance fees was 18.89 percent. The reduction in hedge fund fees is due to the financial crisis that was prevalent in the US.
Hedge fund managers in North America charged the highest, with the average management fee being 1.72 percent and the average performance fee being 19.12 percent. In Europe, this figure was lower, at 1.59 percent and 18.23 percent respectively, while in Asia, the figures stood at 0.51 percent and 19.32 percent respectively.
It is important to be aware of the fees that you have to pay so that you know the cost of investing in hedge funds. Hedge funds can give you a definite advantage because of the kind of returns you can gain through them.
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Average Fees Fund Of Hedge Funds
