Page Comparison

Performance fees determine a fee based on the difference between a fund return and an assigned benchmark return.   You can set up performance fees only at the Total Fund level. Funds can elect to compare the performance of one share class to a benchmark, but the system always accrues the fee amount at the Total Fund level, and allocates it to all classes according to the fund's allocation methodology if the fund is a multiple class fund. 

Performance fees differ from other expense types in that they are associated with a rolling performance period and a rolling average NAV component.  Other types of expenses usually have one open ended period, and use a prior day NAV based component. For example, a regular variable expense accrues daily, until you close the fee. Every day, the variable expense looks up the prior day NAV, multiples it by a tiered rate, and posts the result as the fee. In contrast, a variable performance fee has many consecutive rules, each spanning a single performance period. For every day in the rule, it calculates an average NAV for the current period.  It multiplies the average NAV  by a performance rate, and posts the result as the fee. The system automatically creates the next period rule created on the last day of the current period fee rule. You must close the latest fee rule in order to stop the fee.

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• Current Period Variable Expense (PVX). Calculated daily. The performance fee is based on daily returns in the current period. It includes the return and NAV for all the days in the current fee rule period. Calculations are always based on prior day numbers, so at the beginning of the next period, the system calculates the expense for the final day in the prior period and creates a separate true-up rule to get to the correct fee for that period.
• Prior Period Budgeted Expense (PBX). Calculated once per calculation period (monthly, quarterly, and so on) and then spread over the number of days in the calculation period, The performance fee is based on the returns and average NAV for the prior period end date. It does not use any return or NAV data for the current rule period. It projects the prior period data onto the current period, spreading (or budgeting) the calculated fee over the current performance period.
• Prior Period Estimated Budgeted Expense (PEX).  This fee is similar to the Prior Period Budgeted Expense, but it treats the projection like an estimate. The performance fee is based on the returns and average NAV for the prior period end date. It does not use any return or NAV data for the current rule period. It projects the prior period data onto the current period, spreading (or budgeting) the calculated fee over the current performance period. However, at the beginning of the next fee period, as with Current Period Variable Expense, it calculates the actual expense for the prior period and creates a separate true-up rule to get to the correct fee for that period.

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The following pages describe each type of performance fee in greater more detail.

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