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Gross asset value, the value of a share of a fund, without
deduction for fees.
The Global Industry Classification Standard (GICS) was
developed by Morgan Stanley Capital International (MSCI) and
Standard & Poor’s (S&P). GICS classifications aim to
enhance the investment research and asset management process
for financial professionals worldwide. It responds to the
financial community’s need for an accurate, complete and
standard industry definition. The GICS structure consists of
10 sectors, 24 industry groups, 62 industries and 132
Global Investment Performance Standards.
GIPS standards are ethical standards to be used by investment
managers for creating performance presentations that ensure
fair representation and full disclosure.
Performance with no deduction for fees.
The highest AUM value achieved for a fund since inception. As
a threshold for the calculation of incentive fees, it serves
to ensure that a fund manager only collects fees on the net
gain over the previously recorded high water mark. For
example, if the value of an investor's contribution falls
to, say, $750,000 from $1 million during the first year, and
then rises to $1.25 million during the second year, the
manager would collect incentive fees from that investor only
on the $250,000 that represented actual growth in the
high-water mark. A high-water mark can be reset, that is the
high-water mark value can be set to the current fund's value.
The minimum return necessary before a fund manager can
collect incentive fees. The hurdle is often tied to a
benchmark rate such as LIBOR or the one-year Treasury bill
rate plus a spread. If, for example, the manager sets a hurdle
rate equal to 5%, and the fund returns 15%, incentive fees
would only apply to the 10% above the hurdle rate.
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