Vault fees and protections
How performance fees are charged per investor, held 30 days and given back on a wind-down, and the protections that hold a manager to a vault's terms.
Performance fees, per investor#
Each subscription keeps its own high-water mark. At a dealing, a holder above their mark pays the performance fee on that gain, in units, and their mark moves up. So:
- you never pay a fee on a gain you didn't have;
- a holder who came in at a high doesn't pay until the vault passes it again.
Fees are held 30 days#
A performance fee isn't the manager's at once. It's held for 30 days, and if the vault winds down in that time (by its drawdown rule, or the manager closing it), the held fees go back to the holders. A manager can't take a fee on a spike and walk away.
The other fees#
| Fee | Charged |
|---|---|
| Management | A yearly rate, accrued at each dealing |
| Entry | On a subscription |
| Exit | On a redemption. Waived when a holder leaves before a wider scope takes effect |
Fees go to the manager's paper balance at each dealing.
Protections#
A vault's safety profile counts the protections it holds:
| Protection | Guards against |
|---|---|
| Drawdown wind-down | A strategy that keeps losing |
| Leverage cap | A manager raising risk after you invest |
| Scope | Trading what the vault never said it would |
| Timelock | A sudden change of strategy or scope |
| Same market | An upgrade onto a different market |
| Manager stake | A manager with nothing at risk |
These are enforced by ftw.trade, not promised by the manager: a managed vault's wallets refuse out-of-scope trades where they sign, and its money moves only between its own wallets until it winds down.