FEES TEND TO DROP DURING BEAR MARKETS

CCM's variable fee structure is designed to produce lower fees during bearish or indecisive markets, when profit opportunities are muted in stocks.

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Management fees are calculated using the table above and a snapshot of our allocations every 90 calendar days.  In bear markets, the model will tend to have a higher allocation to bonds and cash, which would result in lower fees relative to a growth-oriented allocation that is typically held during periods marked by strong bullish trends.

This approach allows clients to remain more patient during bear markets, knowing the model can reallocate capital to stocks once the hard evidence begins to improve, as it did in 2003, 2009, and 2016.

FAVORABLE ODDS

The example below shows a hypothetical fee calculation during a bullish secular trend.

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MIXED ODDS

When the hard data tracked by the model is mixed, our allocations are adjusted as necessary, which in many cases will produce lower quarterly/annualized management fees.

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UNFAVORABLE ODDS

When the hard data is clearly unfavorable relative to the probability of success in the stock market, our allocations typically shift to a defensive posture, which in many cases will produce lower quarterly/annualized fees. 

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FEE REDUCTIONS AND ASSET LEVELS

Some clients may be eligible for discounted fees based on the following schedule:

  • Clients with household balances over $2,000,000 may be eligible for a 5% reduction in fees.

  • Clients with household balances over $5,000,000 may be eligible for a 10% reduction in fees.

  • Clients with household balances over $10,000,000 may be eligible for a 15% reduction in fees.

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