Get the rundown on investing fees at AtlasTrend, plus what you get in return. No surprises, just facts. (3:57 min read)
This information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.
There are enough fees in the investing world to make your head spin. Both current and would-be investors should know exactly what they’re paying for, and what’s being provided in return.
Seems pretty logical, right? Oddly enough, it can often be a frustratingly confusing process. One that requires a financial dictionary and the patience of a Jedi.
We’d rather spare you the pain, and instead be as transparent as possible. After all, it’s your hard-earned cash we’re talking about.
Let’s take a look at the simple investing fees that apply to any Trend investments.
Why do you charge fees?
We charge a 0.99% yearly management fee because we actively manage your money.
Once you pick a Trend and invest, we take care of the rest. The rest being trying to maximise your returns without you having to lift a finger.
You don’t need to worry about buying and selling stocks at the right time, staying up till the wee hours of the night waiting for stock markets around the world to open and close, plus all the other boring, technical things that go into managing international share investments.
Goodbye, admin burden.
Under our fee model, a performance fee is only ever payable if the Trend you’re invested in has outperformed the MSCI World Net Total Return ex-Australia Index (in AUD) subject to a ‘high water mark’.
This MSCI Index measures the equity market performance of shares listed on the exchanges of 23 of the world’s major developed economies excluding Australia, and factors in reinvested net dividends.
The performance fee is only ever payable if all these conditions are met:
- the Trend performs better than the Index
- the unit price is greater than the high-water mark; and
- a performance fee hasn’t already been payable for that level of return.
It should really be called an outperformance fee since the 15% performance fee is equal to the outperformance of the Trend against the Index. We also have to beat the index after the 0.99% management fee has been taken into account.
Let’s say for example, you invested in a Trend that increased 10% in value over the year, and the Index was up 7% for the same period.
If you had invested $10,000, your investment would be worth $11,000 after a year. We hypothetically outperformed the Index by 3% ($300) so the performance fee payable to us would be $45 (being 15% of $300) and you’d keep the remaining $955.
Couldn’t you just DIY on the Learn plan and avoid investing fees?
Absolutely. You could technically use our Learn plan to unlock all our portfolios and copy the investment team’s strategy; we tell you how we’re investing even if you haven’t invested money with us.
The more challenging part would be trying to achieve the same returns, deciding when to trade the shares, and at what specific prices (usually at an ungodly hour since we’re dealing with international shares).
You may also be faced with higher brokerage or foreign exchange conversion costs than you would pay as part of a Trend, not to mention the headache of sifting through all the trade contracts to complete your tax return.
Why not leave it to the pros and save yourself the hassle?
We take care of the admin burden by managing it all for you. Plus, you’ll get an annual tax statement, so you have one less thing to worry about when tax time rolls around.
What are you doing for 0.99%?
Finding, analysing and trading shares that are most suited to the Trends, keeping a very close watch on relevant news for every stock and assessing whether any trading is required, reading and analysing industry and company reports, continually developing risk management strategies to account for the highs and lows of markets, managing brokers who execute the trading decisions, summarising key investment news to provide reports for investors, actively monitoring of all investments in the funds, liaising with the relevant third parties for audit and compliance processes for the funds, plus other arduous administrative duties.
We could go on, but the critical point to remember is: there’s a whole lot happening in the background.
Right, so let’s take a closer look
Based on our current fee structure, if you invested $10,000 in the Online Shopping Spree Fund between FY16-17 (1 July 2016 to 30 June 2017), you would have made approximately $2,091 before fees.
During that time, you would have paid around $110* in management fees, and $86 in performance fees as the fund outperformed the index by 5.7%.
Since each fund typically incurs ordinary expenses capped at an annual 0.10% (to cover the cost of auditors, ASIC filings etc.), you would have also been charged around $11* during this period.
Atlas Trend would have collected approximately $196 in fees, you will have paid up to $11 in expenses (assuming no extraordinary expenses), and made around $1,884 gain in this example after fees.
The above example shows a trend outperforming. If you were in a trend that underperformed the benchmark or made a loss, the management fee (.99% p.a) and fund expenses (0.10%) would still be payable out of the value of your investment.
While you should not take past performance as an indicator of future performance, this hopefully provides a high-level view of the kinds of fees to expect when investing in the world’s megatrends, and getting exposure to international stocks you don’t have to pick and manage yourself.
Whether you consider the above affordable will depend on how much time and effort you want to spend maintaining your portfolio.
If you’re leaning toward an easy, hassle-free option where you simply pick a Trend you believe in then put your feet up – give AtlasTrend a try.
During your 7-day free trial, you’ll get to uncover all our portfolios, insights and other investors perks.
*The management fee is calculated on the daily value of the investment.