What are the costs, and how do CTAs get paid?
There are basically three types of charges involved when a managed account is handled by a CTA. An annual management fee usually between 1–2 % of the value of your account is charged for the overseeing of the trading in your account. Normally this fee is charged in monthly, for example a 2% annual fee would result in a 0.1667% monthly charge being applied to the account. Most CTA’s also charge a performance incentive fee which typically runs from 15% – 25% of the cumulative net trading profits calculated at the end of each quarter. The net trading profits are the combined total of profits and losses from trading. If the manager has not generated a new net profit in the account, the incentive fee is not charged during that period. Other costs associated with a managed futures account include brokerage costs, exchange and regulatory association fees. ALTAVRA does NOT charge a load, upfront or initial fee on any account.
