I really just wanted to improve this headline at Bloomberg:
“Ex-Bridgewater Analyst Wang Starts No-Fee Hedge Fund”
Specifically, the article states:
“That’s why Convoy Investments LLC, the global macro fund he started in November with former Bridgewater software engineer Robert Wu, isn’t charging a performance fee to investors and only a 1.25 percent management fee, he said. The New York-based firm will even manage money pro bono for foundations and underfunded pensions for up to 25 percent of the firm’s assets.”
Wait a second. They’re ONLY charging 1.25%?? That’s not “no fee” at all. The problem here is that the average managed fund charges about 0.9%. So this fund is not a “no fee” fund and it’s also still a very expensive fund relative to other actively managed funds. Yet the article makes it sound like this fund is a huge bargain and even resembling a non-profit….
Now, maybe this is “low” for a hedge fund. I guess the lack of a performance fee is certainly unusual. But let’s not get all crazy here. 1.25% is still a high fee relative to most other actively managed funds out there. And it’s certainly not a “no-fee” fund. The problem in this industry is that fees are still WAY too high in my opinion and need to come down a lot. Here’s to hoping that this is a trend we start to see more of.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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