Strategy creators may choose the option to charge you for licensing their strategies on the profit they generate in your portfolio.
We wanted to ensure subscribers only pay the strategy creator once for the value created.
For this reason, the success fee is calculated based on the incremental high-water mark (HWM) of the user's live run growth. It's likely that two users allocating assets to the same syndication, at different times, will also end up with different success fees.
Losses on the live run must be offset by greater profits before the subscriber pays a success fee.
To illustrate the calculation, we have prepared a short example. It begins with a profit, followed by a loss, a profit not exceeding the previous HWM, and ends with a profit that does exceed the previous HWM.
For completeness sake: In the last month, the profit above the previous HWM is $1.500 - $1.200 = $300. Where $300 * 20% = $60 charge.
Each live run has it's own HWM, and thus success fee. As mentioned above, Tuned tracks HWM from each month to the next, to charge a fair success fee. However, if a live run is stopped and then started again, the HWM will begin again from scratch.