Performance net of Fees

[cobbler19]

If I have gross monthly returns of: January=1.8% February=2.1% March=1.3% April=-1.5% May=2.6% June=2.35% July=-0.65% August=3.2% September=1.4% October=1.6% November=-1.5% December=2.4% How can I adjust these returns to account for a 20% annual incentive fee of profits? Is there a particular formula used to adjust monthly returns net of an annual fee?

 

[Yayyywork]

Not that I am aware of. But adjusting the returns by may .8 work. I just threw together a quick excel and that seemed to come out right. (Although it was a pretty crude excel) if you take the geometric mean and adjust by the .8 you get pretty close as well depending on how close you need to be. In reality incentive fee is accrued throughout the year and summed up. Conceptually you would just annualize the monthly performance and calculate off that.

 

[pokhim]

cobbler19 wrote:
If I have gross monthly returns of: January=1.8% February=2.1% March=1.3% April=-1.5% May=2.6% June=2.35% July=-0.65% August=3.2% September=1.4% October=1.6% November=-1.5% December=2.4% How can I adjust these returns to account for a 20% annual incentive fee of profits? Is there a particular formula used to adjust monthly returns net of an annual fee?

Is there a high water mark or is the ‘incentiive fee’ just 20% of the monthly return?

 

[cobbler19]

It’s 20% of annual return