Allianz Global Investors has planned to introduce an ‘outperformance’ pricing model that will be available on a range of selected strategies for the UK market.
The new model will charge a low fixed fee, plus a percentage outperformance fee, charged only when the fund outperforms its benchmark. Therefore clients can pay much lower, near passive fees, when the fund underperforms and only pay a performance fee should the fund outperform its respective benchmark.
On any day a fund outperforms its benchmark, a fixed, additional fee of 20% of that day’s outperformance will be accrued as a performance fee. At the end of the year, if the fund’s overall performance has been positive, AllianzGI will be paid the total performance fee accrued during the year.
The funds included in the outperformance model include –
– Allianz Best Styles Global AC Equity fund
– Allianz Emerging Markets Equity fund
– Allianz Global AC Equity Insights fund
– Allianz UK-Mid Cap fund
– Allianz UK Opportunities fund
All funds will have a base fee of 20bps, apart from the EM equity fund, which will charge 30bps. Underperformance will be recorded on a daily basis and will reduce any outperformance charge.
If at the end of the year the fund has underperformed its benchmark overall, then clients will only pay the low fixed fee. Moreover, any underperformance will be recorded and carried forward for up to a further five years, or until the underperformance is recovered.