A. Performance Fee
ICA charges a Performance Fee of 25%, and a Management Fee of 0.1667% monthly. Performance fee or incentive fee is a percentage of total monthly profit goes to account manager. The 25% performance fee is taken on a high-watermark basis. A high watermark is the previous high in the account-participant's account (adjusted for deposit, withdrawals, and fees). It ensures that the fee is only deducted based on new performance, rather than just recovery from poor performance. In other words, if an account loses money over a period, the account must first recoup previous losses and then any profit above the high watermark is subject to the 25% performance fee.
B. Management Fee
ICA will assess the investor’s account a monthly fee equal to 0.1667% (2% Yearly fee) of the Net Assets in the Client's account at the end of each month. Net Assets are the account's total assets and liabilities, including realized and unrealized gains and losses. The management fee is charged to cover administrative and management procedures.
C. FCM and other Fees and Expenses
- Broker Spread: The FCM(s) is compensated by its brokerage services through the bid-ask spread. Such spread is marks the difference between the buying and the selling of a given currency pair. Such spread is not the same for all currency pairs, and they range from 0.5 pip to 6 pips.
The bid/ask spread is a one-time cost, reflected at the start of every new trading position.
- Broker Commission: ECN brokers charge commission. ECN brokers offer lower spread than any regular brokers, the spread with these brokers sometimes reaches to a half of a pip. These brokers are only compensated by their brokerage services through commission.
- Accrued Rollover Interest: Any trade that is carried overnight has a rollover credit or debit, depending on the side of the trade that is taken. Therefore, there will be positions that will represent a cost to have them open overnight, as the negative interest will be debited from the equity balance on a daily basis as long as the position remains open.