Forex fund management FAQ

Can I use my own forex broker?

Yes, you can use any broker you want.

How much return I can expect per a month?

In average we make from 8-16% per a month.

How much is max dd (draw-down) ?

Maximum allowed draw-down is 8%. If the market crash and hit 8% draw-down GSH head fund managers stop trading your account.

How much GSH fund managers maximum risk per a trade?

GroundStone Holdings managers risk maximum 3% per a trade, but normal 0.5%.

What information GSH need to management my forex account?

We need to get Login number, Server name and Password.

Is there any entry or setup fee?

No lock-in periods, entry, exit or annual management fees.

How much is minimal investment?

Minimum investment $25,000

How much time it takes to start trading my account?

We start at the day we receive login details.

How much is profit share?

We’re so confident in our ability to deliver above market returns that we only charge a 30% performance fee on profits generated (this is known as a “high watermark fee”).

What does high-water mark mean?

A high-water mark is the highest peak in value that an investment fund or account has reached. This term is often used in the context of fund manager compensation, which is performance-based. The high-water mark ensures the manager does not get paid large sums for poor performance. If the manager loses money over a period, he must get the fund above the high-water mark before receiving a performance bonus from the assets under management (AUM).
BREAKING DOWN ‘High-Water Mark’
High-water marks ensure that investors do not have to pay performance fees for poor performance, but more importantly, guarantee that investors do not pay performance-based fees twice for the same amount of performance.

High-Water Mark in Practice
For example, assume an investor is invested in a hedge fund that charges a 20% performance fee, which is quite typical in the industry. Assume the investor places $500,000 into the fund, and during its first month, the fund earns a 15% return. Thus, the investor’s original investment is worth $575,000. The investor owes a 20% fee on this $75,000 gain, which equates to $15,000.

At this point, the high-water mark for this particular investor is $575,000, and the investor is obligated to pay $15,000 to the portfolio manager.

Next, assume the fund loses 20% in the next month. The investor’s account drops to a value of $460,000. This is where the importance of the high-water mark is noted. A performance fee does not have to be paid on any gains from $460,000 to $575,000, only after the high-water mark amount. Assume in the third month, the fund unexpectedly earns a profit of 50%. In this unlikely case, the value of the investor’s account rises from $460,000 to $690,000. Without a high-water mark in place, the investor owes the original $15,000 fee, plus 20% on the gain from $460,000 to $690,000, which equates to 20% on a gain of $230,000, or an additional $46,000 in performance fees.

Value of a High-Water Mark
The high-water mark prevents this “double fee” from occurring. With a high-water mark in place, all gains from $460,000 to $575,000 are disregarded. But gains above the high-water mark are subject to the performance-based fee. In this example, beyond the original $15,000 performance-based fee, this investor owes 20% on the gains from $575,000 to $690,000, which is an additional $23,000.

In total, with a high-water mark in place, the investor owes $38,000 in performance fees, which is $690,000 less the original investment of $500,000 multiplied by 20%. Without a high-water mark in place, which is below industry standards, the investor owes a 20% performance fee on all gains, which equates to $61,000. The value of a high-water mark is unquestionable.

I still have more questions

We are always happy to answer your questions. Please call us at +386-70-455-166. If you prefer, you can email your question to support@groundstoneholdings.com