Performance related fee

To earn our performance fee, every six months the fund has to increase in value and beat 2 key benchmarks:

1. The Bank of England base rate.
2. The unit price at the start of the six months* – our High Water Mark (HWM).

When we do succeed, our fee is 20% of whatever out-performance we deliver, above the Bank of England rate.

For example, say the Bank of England rate is 0.50% (0.25% over 6 months) and we grow the fund by 2.25% over that six month period. That’s 2% out-performance, of which we get 0.4% and your fund gets 1.6%. Add back on the Bank of England rate, leaving your fund with 1.85% growth overall. For a fuller explanation of how the performance fee is calculated, please read the Simplified Prospectus for this fund.

Once the HWM goes up, that becomes our new benchmark, incentivising us to constantly out-perform it every six months. If we don’t beat our last HWM and the Bank of England rate, we don’t earn a performance fee. And if the unit price at the start of the six months is lower than the previous HWM, the previous HWM will continue to apply.

*If you buy more units half way through the six months, we set the High Water Mark for those units at the price you bought them.