RupeeCase
Education . PMS Fee Math . 2 of 3
The Fee Stack
Eighteen percent gross. The investor sees fourteen.
A 2 and 20 fee model running on a Rs 25L book that grows 18 percent in a year. Hurdle 10 percent. Perf fee charged on return above mgmt-fee-net of hurdle. GST 18 percent on every fee line.
Line itemon a Rs 25L corpus growing 18 percent in year one
Drag . in percent
Gross returnwhat the strategy actually earned that year
+18.00
Management fee . 2 percent on AUMcharged regardless of performance . the fixed line
-2.00
GST 18 percent on management feealways paid . hidden in most one-pagers
-0.36
Performance fee . 20 percent above 10 percent hurdleon net-of-mgmt return . that is 6 percent of the book
-1.20
GST 18 percent on performance feebecause GST applies to every fee line
-0.22
STT . brokerage . exchange charges on turnoverillustrative . varies with rebalance frequency
-0.30
Net return to the investorwhat actually lands in the statement
+13.92
Total fee dragthe gap between brochure and statement
-4.08
Year 10 . Gross 18%
Rs 1.31Cr
Brochure number . if there were no fees
Year 10 . Net 13.92%
Rs 0.93Cr
Statement number . what the investor actually has
Compounding gap
Rs 38L
On a Rs 25L starting ticket . over 10 years
Tanmay Kurtkoti . Builder of RupeeCase
Source . SEBI PMS rules . illustrative fee model