Does the Hyperion Global Growth Companies PIE Fund charge a performance fee?
Yes — in addition to its annual fund charge.
Performance fee paid last period
0.00%
of NAV
Annual fund charge (on top)
4.38%
p.a. — the base ongoing cost
Verbatim from the Product Disclosure Statement
20% of the Fund's outperformance (net of Annual Fund Charges) relative to its benchmark return, multiplied by the Net Asset Value of the Fund. The Fund's return net of Annual Fund Charges and extraordinary expenses must exceed the performance of the benchmark at the end of the six-month period; and the Fund's return net of Annual Fund Charges and extraordinary expenses must be 0.00% or greater at the end of the six-month period; and any previous underperformance versus the benchmark must first be recovered before any Performance Fees can be paid.
How to read a performance fee
A performance fee is paid only when the fund's return exceeds a hurdle benchmark — often the OCR plus a margin, or a market index. The fee is usually a percentage share of returns above the hurdle (commonly in the low double-digits) and is subject to a "high-water mark" so the same gain can't be charged twice. Many NZ MIS funds also impose a hard cap as a percentage of NAV so the perf fee can't run unbounded in a high-return year.
Performance fees vary year-to-year — a fund can show a high perf-fee number one period and zero the next, depending on whether it cleared its hurdle. The structural questions worth answering before investing are: What's the hurdle? (cash-rate hurdles are easier to clear than index hurdles) Is the high-water mark perpetual or annual? (perpetual = stronger investor protection) and Is there a cap? (cap = downside-bounded fee).