The profit sharing methodology at BOTS Capital
The platform for automated investing – has always focused on transparency and fairness in the investment world. In this article, BOTS explains how the clear profit sharing structure works, including the percentages charged, and how the high water mark is an integral part of this.
The profit sharing structure of BOTS Capital
BOTS has a two-tiered fee structure consisting of a management fee and a performance fee. This structure is designed to align the interests of investors and strategy developers on the BOTS platform.
The management fee is set at 2% per year. This fee is used to cover the operational costs, the development of the 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 looking to minimize costs.
In addition to the management fee, BOTS charges a performance fee of 20%. However, this fee only applies to the profit that is made. This is withdrawn monthly on the first of the month, but only if a profit has actually been made. This encourages the developers of the strategies to consistently deliver positive results.
The high water mark
An essential 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 close 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 of time, it must first return above this highest peak value before it is eligible for a performance fee from assets under management (AUM) again. This principle protects investors from paying performance fees for volatile or inconsistent returns.
No hidden costs
A key advantage of this structure is that there are no transaction fees or hidden fees charged. At BOTS it is clear: only if you make a profit, BOTS also makes a profit.
BOTS offers a fair and transparent way of investing, with a clear and fair profit sharing structure. This structure motivates developers to consistently achieve positive results, fully in line with the expectations and interests of our investors. 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 for informational purposes and should not be construed as investment advice.