Help CenterWhat Is PAMM (Percentage Allocation Money Management)?
PAMM, or Percentage Allocation Money Management, is an innovative investment system that allows investors to allocate their funds to a professional money manager. These funds are pooled into a single account, enabling the money manager to trade and manage the investments on behalf of the investors.
The money manager earns a performance fee, calculated as a set percentage of the profits generated through trading. The remaining profits or losses are distributed back to the investors proportionally based on their contribution to the total pool of funds.
Example of How PAMM Works
Investment Contributions:
- Investor A: €50,000
- Investor B: €30,000
- Investor C: €15,000
- Investor D: €5,000
Total Funds Managed by the Money Manager: €100,000
Profit Distribution:
If the money manager charges a 20% performance fee and achieves a profit of €12,500 by the profit-sharing date:
- The money manager retains €2,500 (20% of the profit) as their performance fee.
- The remaining €10,000 is distributed proportionally among the investors based on their respective contributions:
- Investor A (50% contribution): Receives €5,000
- Investor B (30% contribution): Receives €3,000
- Investor C (15% contribution): Receives €1,500
- Investor D (5% contribution): Receives €500
PAMM offers a streamlined way for investors to benefit from professional trading expertise, with profits and losses shared in alignment with their individual contributions.