|
As highlighted in foregoing research pages, optimal benchmarking and compensation rules are important topics for the asset management industry. Typically, standard asset managers are paid a fee that is a percentage of the respective funds total net assets (TNA). In prinicple, and from a theoretical point of view, it would make sense to compensate the asset manager, at leasy partly, as a function of performance with respect to a benchmark. Yet, in practice this is only marginally the case. In that respect, for 90% of US Equity Mutual Fund advisory contracts the fee is specified as a percentage of TNA.
Even though, the portfolio delegation model typically suggests a compensation rule based on relative performance either with respect to competitors...
|