Do Performance Fees Work?

Performance fees can be costly for investors but for fund managers they carry the danger of not getting paid if they fail to beat the index

John Rekenthaler 7 November, 2018 | 8:28AM

Stock market charts

Performance fees are a controversial topic with investors. Some embrace them, while others see them as adding another layer of cost to investing in actively managed funds. 

Do they incentivise fund managers to work harder and perform better?

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About Author

John Rekenthaler

John Rekenthaler  John Rekenthaler is vice president of research for Morningstar.

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