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- Title
Are performance fees justified?: YES.
- Authors
Carroll, John B.
- Abstract
The article presents commentary from John B. Carroll, president of GTE Investment Management Corp., on why fees paid to fund managers should be based on performance. In his view it boils down to fairness. Managers should have to deliver performance in return for compensation. Although an underperforming manager can be fired, until that time he or she may have delivered (and been paid for) several years of poor returns. Active fund managers should perform at least 200 basis points above an appropriate benchmark, and should not earn a full fee in the event they do not.
- Subjects
PORTFOLIO management (Investments); MUTUAL funds; RATE of return; CARROLL, John B. (John Bissell), 1916-2003; GTE Corp.; PROFESSIONAL fees
- Publication
Financial Executive, 1989, Vol 5, Issue 3, p26
- ISSN
0895-4186
- Publication type
Article