Overview
Traditionally, investors must pay an annual fee to an ETF or mutual fund as well as trading commissions to their brokerage. With Hedgewise, clients pay a fee that is similar or less than competitive funds which also covers all trading commissions. In addition, many of our products include other benefits, such as tax optimization or risk customization. We believe this presents a compelling value proposition for our clients which we are able to offer due to our unique account structure.
Annual Fee
| Assets Under Management (AUM) | Annual Fee |
|---|---|
| $100,000 - $1,000,000 | 0.7% |
| $1,000,000 - $2,000,000 | 0.6% |
| $2,000,000 and over | 0.5% |
Hedgewise charges a percentage of each client's Net Liquidation Value ('NLV') as an annualized percentage, applied on a daily basis (252 business days are applied in this calculation method). NLV is equal to: Total cash value + stock value + securities options value + bond value + fund value. The annualized percentage fee varies depending on total AUM.
Example: Your previous day ending NLV is $100,000. Your fees for the given day will be: 0.7%*$100,000/252=$2.78.
Keep in mind that this fee is similar to one you might automatically pay to a competitive ETF or mutual fund through an expense ratio, but that our service includes access to a number of additional benefits.
Hedgewise does not charge any account sign-up or termination fee. All Interactive Brokers accounts opened through Hedgewise will not be charged a monthly minimum or IRA custodial fee. Hedgewise will also pay for or reimburse all trading commissions (excepting sub-advisory clients). Clients are responsible for all other expenses related to trading the assets in their account, including, but not limited to, ETF fees, bank service fees, and debit balances.
Note that fee discounts apply to all funds under management. For Investment Advisers, total AUM includes all sub-advisory accounts managed with Hedgewise. However, sub-advisory accounts are not eligible for fee reimbursement, including trading commissions, monthly minimum fees, and IRA custodial fees.
Fees will be deducted directly from a client's account in the month following the month which just ended, or immediately upon termination of an account for the amount of fees outstanding. Upon request, clients may be invoiced separately.
Minimum Monthly Fee
For smaller accounts, Hedgewise must charge a minimum monthly fee of $19.99 to cover basic administrative and trading costs. We believe this fee is reasonable given that we cover all trading commissions for most clients.
This minimum only applies if the annual fee calculation as described above falls below this amount.
Disclosure
This information does not constitute investment advice or an offer to invest or to provide management services and is subject to correction, completion and amendment without notice. Hedgewise makes no warranties and is not responsible for your use of this information or for any errors or inaccuracies resulting from your use. Hedgewise may recommend some of the investments mentioned in this article for use in its clients' portfolios. Past performance is no indicator or guarantee of future results. Investing involves risk, including the risk of loss. All performance data shown prior to the inception of each Hedgewise framework (Risk Parity in October 2014, Momentum in November 2016) is based on a hypothetical model and there is no guarantee that such performance could have been achieved in a live portfolio, which would have been affected by material factors including market liquidity, bid-ask spreads, intraday price fluctuations, instrument availability, and interest rates. Model performance data is based on publicly available index or asset price information and all dividend or coupon payments are included and assumed to be reinvested monthly. Hedgewise products have substantially different levels of volatility and exposure to separate risk factors, such as commodity prices and the use of leverage via derivatives, compared to traditional benchmarks like the S&P 500. Any comparisons to benchmarks are provided as a generic baseline for a long-term investment portfolio and do not suggest that Hedgewise products will exhibit similar characteristics. When live client data is shown, it includes all fees, commissions, and other expenses incurred during management. Only performance figures from the earliest live client accounts available or from a composite average of all client accounts are used. Other accounts managed by Hedgewise will have performed slightly differently than the numbers shown for a variety of reasons, though all accounts are managed according to the same underlying strategy model. Hedgewise relies on sophisticated algorithms which present technological risk, including data availability, system uptime and speed, coding errors, and reliance on third party vendors.