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On Sept. 30, 2026, the Securities and Exchange Commission proposed two rule changes which would allow performance based compensation as an option on certain registered management investment companies. Here is a link to a fact sheet of the SEC announcement about the proposed changes.
The rule changes seems to allow hedge fund like fee compensation to be paid from certain mutual funds and ETFs. I think such performance based compensation is opposite the reasons such funds came into existence.
Buyer beware if these rule changes are adopted.
William, performance fees sound fine in theory until you realize the manager shares in the upside profits, but leaves investors holding the bag on the losses.
I doubt many in this community would take the bait. HD readers generally understand that minimizing costs and avoiding unnecessary complexity are key to long-term returns.
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