The performance fee is the amount an investor pays to a strategy provider for profitable investments. This performance fee is set by a strategy provider and is calculated at the end of a billing period or when an investor stops copying a strategy.

Performance fee calculation

The performance fee paid will be based on this formulae:

Investment Performance fee = (Investment Equity + Sum of Paid Performance fee + Copy dividends - Invested amount) × Performance fee rate  - Sum of Paid Performance fee)

If there is no previously paid performance fee, the formula will be:

Investment Performance fee = (Investment Equity + Paid Copy dividends - Invested amount) * Performance fee rate

Note: Copy dividends are only available for Social Pro and Social Standard accounts.

Note: Results are rounded down.

The formulae can be broken down to better understand the calculations:

Note: While a strategy provider can modify the fee rate for a strategy, the new rate is only applicable for new investments; investments already created will not be changed.

Here’s an example:

An investor starts a new investment with a new strategy provider. The investment’s starting balance is 500 USD. The performance fee set by the strategy provider is 10%. An investor makes a profit of 1,500 USD and their investment equity at the end of the billing period is 2,000 USD.

Calculated performance fee = (Investment Equity + Copy dividends - Invested amount) * Performance fee rate

Note: Copy dividends are only available for Social Pro and Social Standard accounts.

= (2000 - 500) x 10%
= 1500 x 10%
= 150 USD

Therefore, the investor’s investment balance will be 1,850 USD after paying the performance fee.

Here’s an example if an investor has previously paid performance fees:

The investor’s starting investment balance is 1,000 USD and the performance fee fee is set at 15%. The investor makes a profit of 2,000 USD and their investment equity at the end of the billing period is 3,000 USD. The investor has previously paid a performance fee amounting to 150 USD. The strategy provider has previously chosen to withdraw a part of their profit from the strategy and a proportionate amount of 200 USD is withdrawn from the investment account.

Calculated performance fee = (Investment Equity + Copy dividends + Sum of Paid performance fee - Invested amount) × Performance fee rate  - Sum of Paid performance fee

Note: Copy dividends are only available for Social Pro and Social Standard accounts.
= (3000 + 200+ 150 - 1000 +) x 15% - 150
= 2350 x 15% - 150
= 352.5 - 150
= 202.5 USD

Therefore, the investor’s investment balance will be 3,000 USD - 202.5 USD = 2797.5 USD after paying the performance fee.

Performance fee calculation scenarios

A performance fee calculation can occur under 2 scenarios:

• A general scenario
• An early investment closure

Each scenario follows a distinct set of processes detailed below.

General scenario 

If an investor continues their investment until the end of a billing period:

For investments in strategies with Social Pro and Social Standard accounts:

• The strategy provider’s order remains unaffected.
• All copied orders are closed
• The performance fee is calculated.
• The performance fee is deducted from the investment.
• New copy coefficient is calculated and all copied orders are reopened with the same price (zero spread) and new copy coefficient.
• The calculated performance fee is credited to the strategy provider’s Social Trading Commission account in the Personal Area (PA).

For investments in strategies with Pro accounts:

• The strategy provider’s order and all copied orders remain unaffected.
• The performance fee is calculated.
• The performance fee is deducted from the investment.
• The calculated performance fee is credited to the strategy provider’s PIM Commission account in the Personal Area (PA).

Early investment closure:

If the investor decides to close their investment account before the end of the billing period:

• All copied orders are closed at the current market price.
• The performance fee is calculated
• The performance fee is deducted from the investment account.
• The calculated performance fee is credited to the strategy provider’s Social Trading Commission account (PIM commission account for Pro strategies) in the PA, at the end of the billing period.

Details of calculated performance fee and paid per investment are available in the Performance fee Report found for each strategy in the strategy provider’s PA.