This example describe the expected workflow of a performance fee that has a rule type of Prior Period Budgeted Expense. It shows a monthly prior period budgeted performance fee.
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This example shows many sample values as percentages. You often enter percentages into the Eagle system using a decimal format. |
Step 1. Set Up Performance Fee Rule
You set up a performance fee rule, including bounds, rates, min/max rate restrictions, fee approval option, and benchmark.
The performance fee rule uses the information shown in the following table. Notice that the performance fee requires approval prior to posting.
Benchmark Rate Adjustment | Null |
Return Difference Min | 0% |
Return Difference Max | 0% |
Fee Increment | 0.35% |
Minimum Fee Rate | 0.70% |
Maximum Fee Rate | -0.70% |
Benchmark | M |
Benchmark Rate Adjustment | Null |
Return Difference Increment | Null |
NAV Comparison Period | Null |
Fee Approval | Manual |
...
Effective Date | July 1 |
Adjusted Return Difference | -14.19% |
Final Fee Rate | -0.0497% |
ANA | 140,256,983.23 |
ANA Date | June 30 |
Days In Year | 365.00 |
Days In Prior Month | 30.00 |
Fee Amount | -5,725.37 |
The system saves this data to a performance fee activity table and links it to the performance fee rule by fee id and fee row instance. The system also saves the fee amount to the performance fee. The rule is still Pending. (If you set the Fee Approval status as AutoApproval, the system places the fee in an Active status instead.)
| Expense Account Name | Performance Fees |
| Accrual Begin Date | July 1 |
| Accrual End Date | July 31 |
| Fee Amount | $-5,725.37 |
| Status | Pending |
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You run the Performance Fee Approval event using the Approve Performance Fee panel. The panel runs the Performance Fee Calculation Query, returning the July fee rule and its associated calculation output data. You must then approve the rule by submitting the Performance Fee Approval event, that which changes the rule from Pending status to Active status. You also have the opportunity to change the performance fee rate and performance fee end date on the performance fee rule if you want to adjust the calculated amount.
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