The profit sharing methodology at BOTS:
The platform for automated investing – has always focused on transparency and fairness in the investment world. In this article, BOTS explains how its clear profit sharing structure works, including the percentages that are charged, and how the high water mark is an integral part of it.
The profit sharing structure of BOTS
BOTS has a dual-fee structure that consists of a management fee and a performance fee. This structure is designed to align the interests of investors with the strategies on the BOTS platform.
The management fee is set at 2% per year. This fee is used to cover operational costs, the development of algorithms, and the daily operation of the platform. This fee is relatively low compared to traditional investment strategies, making BOTS an attractive option for investors who want to minimize costs.
In addition to the management fee, BOTS charges a performance fee of 20%. However, this fee is only applicable to the profits made. It is withdrawn monthly on the first of the month, but only if a profit has actually been realized. This encourages the developers of the strategies to consistently deliver positive results.
The high water mark
A crucial aspect of the profit sharing structure at BOTS is the implementation of a 'high water mark.' This term, often used in the context of performance-based compensation, refers to the highest peak in value that an investment strategy has reached at the end of the month.
The high water mark ensures that the strategy is not richly rewarded for mediocre performance. If the strategy loses money over a period, it must first return above this highest peak value before it becomes eligible again for a performance fee from the managed assets (AUM). This principle protects investors from paying performance fees for volatile or inconsistent returns.
No hidden costs
A significant advantage of this structure is that there are no transaction costs or hidden fees. With BOTS, it's clear: BOTS only profits if you profit.
BOTS offers a fair and transparent way of investing, with a clear and honest profit sharing structure. This structure motivates developers to achieve consistently positive results, while protecting investors from paying unnecessary fees. With the high water mark and a clear fee structure, BOTS sets a new standard in the world of automated investing.
Disclaimer: This article is intended for informational purposes only and should not be considered as investment advice.