MindSynch OneBit cryptocurrency bot uses an Accumulated Profit Compensation (APC) system to charge our clients a 30% commission. You pay only when you are truly earning a profit.
What is APC system? And how is it calculated?
APC is based on the monthly profit earned from trades made by OneBit API. Using the APC method, loss from previous months not yet compensated will be deducted from the current month’s gains, the balance of which will be used as the basis for the 30% fee. In this way, you benefit in two ways:
- Avoid paying a fee for poor performance
- Never pay performance fees twice.
As such, you will only pay a performance fee/commission on new profits.
Let’s take a hypothetical example. In the following table, we report three months’ asset movement and profit.
The example above reflects the asset movement from monthly beginning to monthly end, with new deposits and withdrawals of the total Asset under Management (AUM). The profit is generated by the OneBit system based on every single trade conducted by the bot. Our commission is calculated simply based on the net profit after compensating previous losses.
What is the difference between APC and High-Water Mark method?
The high-water mark (HWM) is the highest level of value reached by an investment account or portfolio. It is often used as a threshold to determine whether a fund manager can gain a performance fee/commission. Investors benefit from a high-water mark by avoiding paying performance-based bonuses for poor performance or the same performance twice. As such, investors will only pay a performance fee/commission on new profits.
As you can see from the above diagram, an investment portfolio reached its first HWM in the first month, but the value dropped during Month 2. Since the total asset is below the HWM, investors are not charged performance fees in Month 2. In Month 3, the portfolio retrieved its growth potential and reached a higher total asset than in Month 1. Thus, a new HWM is achieved, and the portfolio manager gains a performance bonus for the portion of the investment above the previous high-water mark.
In their fundamental logic, APC and HWM are identical, aiming to compensate investors’ losses. Both help investors avoid paying the performance fee for the same part of return twice after a previous loss.
The difference lies in the calculation of profit. HWM uses the AUM movement and gross return rate to calculate the profit, an estimated value. The calculation becomes more complicated when the account experiences frequent deposits and withdrawals. The adjustment of the HWM is dependent on the direction of the flow (deposit or withdrawal). If you add to your portfolio, the deposit is simply added to the high watermark. Any benefit of having additional capital for producing returns is reflected in an increase in a new HWM at month-end. If you are withdrawing from the portfolio, then the HWM has to be reduced proportionately. This is because the simple subtraction method actually increases the HWM on a percentage return basis and unfairly punishes the portfolio manager.
APC, on the contrary, avoids the estimation process. OneBit intelligent system records every order detail and directly extracts actual profit data from each transaction. This ensures that we have an accurate summary of all real gains at the end of the month.
You can have full visibility of your profit breakdown under OneBit – ProfitStatistics – By Day/ By Market (cryptos)/ By Month.