Signature of the client
Annexure 4A: Illustration for Annexure on Fees and Charges74
This computation is for illustrative purpose only. Portfolio Managers may suitably modify this to reflect their fees and charges.
The assumptions for the illustration are as follows:
a. Size of sample portfolio: ₹50 lacs75 over
b. Period: 1 year
c. Hurdle Rate: 10% of amount invested
d. Brokerage/ DP charges/ transaction charges: Weighted Average of such charges (as a percentage of assets under management) levied in the past year/ in case of new portfolio managers indicative charges as a percentage of assets under management (e.g. 2%)
e. Management fee (e.g. 2%)
f. Performance fee (e.g. 20% of profits over hurdle rate)
g. The frequency of calculating all fees is annual
Portfolio performance: Gain of 20%
| Nature of Fees | Amount in ₹ | Amount in ₹ |
|---|---|---|
|
Capital Contribution |
50,00,00076 |
|
|
Less: Any other fees (please enumerate) |
XX |
|
|
Assets under Management |
50,00,000 |
|
|
Add: Profits on investment during the year @20% on assets under management |
10,00,000 |
|
|
Gross value of the portfolio at the end of the year |
|
60,00,000 |
|
Less: Brokerage/DP charges/any other similar charges (e.g. 2% of ₹50,00,000) |
1,00,000 |
|
|
Less: Management Fees (if any) (e.g. 2% of ₹50,00,000) |
1,00,000 |
|
|
Less: Performance fees (if any) (e.g 20% of
₹5,00,000 – working given below) |
1,00,000 |
|
|
Less: Any other fees (please enumerate) |
XX |
|
|
Total charges during the year |
|
3,00,000 |
|
Net value of the portfolio at the end of the year |
|
57,00,000 |
|
% change over capital contributed |
|
14.00% |
Calculation of Performance Fees for above
| Serial | Nature of Fees | Amount in ₹ |
|---|---|---|
|
A
|
Profit for the year
|
10,00,000
|
|
B |
"Less: Minimum profit level (Hurdle Rate @10% on
₹50,00,000)"
|
5,00,000
|
|
C
|
Amount on which Profit Sharing Fees to be calculated (B-A) |
5,00,000
|
|
D
|
Performance Fees (@20% of C) |
1,00,000
|
Portfolio performance: Loss of 20%
| Nature of Fees | Amount in ₹ | Amount in ₹ |
|---|---|---|
|
Capital Contribution
|
50,00,000 |
|
|
Less: Any other fees (please enumerate) |
XX |
|
|
Assets under Management |
50,00,000 |
|
|
Less: Loss on investment during the year @ 20% on assets under management |
10,00,000 |
|
|
Gross value of the portfolio at the end of the year |
|
40,00,000 |
|
Less: Brokerage/DP charges/any other similar charges (e.g. 2% of ₹50,00,000) |
1,00,000 |
|
|
Less: Management Fees (if any) (e.g. 2% of ₹50,00,000)
|
1,00,000 |
|
|
Less: Performance fees (if any) |
XX |
|
|
Less: Any other fees (please enumerate)
|
XX |
|
|
Total charges during the year |
|
2,00,000 |
|
Net value of the portfolio at the end of the year |
|
38,00,000 |
|
% change over capital contributed |
|
(24.00%) |
Charges on Portfolio performance: No change
| Nature of Fees | Amount in ₹ | Amount in ₹ |
|---|---|---|
|
Capital Contribution
|
50,00,000 |
|
|
Less: Any other fees (please enumerate)
|
XX |
|
|
Assets under Management |
50,00,000 |
|
|
Add: Profits/Losses on investment during the
year @ 0% on assets under management |
0 |
|
|
Gross value of the portfolio at the end of the
year |
|
50,00,000 |
|
Less: Brokerage/DP charges/any other
similar charges (e.g. 2% of ₹50,00,000) |
1,00,000 |
|
|
Less: Management Fees (if any) (e.g. 2% of
₹50,00,000) |
1,00,000 |
|
|
Less: Performance fees (if any) |
XX |
|
|
Less: Any other fees (please enumerate) |
|
|
|
Total charges during the year |
|
2,00,000 |
|
Net value of the portfolio at the end of the
year |
|
48,00,000 |
|
% change over capital contributed |
|
(4.00%) |
74 SEBI Cir. /IMD/DF/13/2010 dated October 5, 2010
75 Clause 3 (v) of SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020
76 Illustration has been suitably updated to consider minimum investment amount of ₹50 lakh.
Note: The frequency of charging various fees may be specified for every type of fees in the illustration