The fees are absolutely outrageous... there is no hiding the fact.
And yes, you are right, there is no performance hurdle. How this is allowed is beyond me... what an absolute disgrace.
With this fee structure comes incredible expectation of alpha. Why does this scare me for closed funds like VG1 and VG8?
In the event they don't achieve alpha, the funds will be even more susceptible to a large discount.
Who wants to pay a flat management fee of 1.5% and a 15% performance fee for a fund not achieving substantial alpha? When you can achieve better performance paying .07 of a percent.
I think investors can stomach paying around the 1% for an active manager... I further think they are willing to pay performance fees for outperformance... but when you are charging performance fees for zero performance... you have reached peak greed.
VG1 Price at posting:
$2.20 Sentiment: None Disclosure: Not Held
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