Open a PAMM account and invest a certain amount of funds in it (manager's capital), which they risk on a par with their investors. The manager creates a proposal, where the terms of cooperation are defined, including the manager's remuneration; the percentage of investor profits they receive as a reward for managing the account.
Assess the effectiveness of different managers by looking at the independent ratings, and select an account to invest in. If the manager achieves a positive trading result, the investor makes a profit, paying out a percentage of this to the manager.
Since the PAMM account made a 200% return, the manager earns 200% on their initial deposit; i.e. 600 USD. The investor gets 200% of 200 USD; i.e. 400 USD.
All profits and losses are strictly distributed in direct proportion to the amount of funds invested. In the above example, the manager's share is 60% (300 USD), and the investor's is 40% (200 USD), giving a total account balance of 500 USD.
The investor pays the manager 20% of their 400 USD profit, which is 80 USD.
After the results of the trading interval and the remuneration payout have been calculated, the investor's account will have the following balance: 200 + 400 − 80 = 520 USD. The manager's balance will be: 300 + 600 + 80 = 980 USD.
Assemble a portfolio made up of individual PAMM accounts and invest some of their own funds into it, which ensures that they take a more cautious approach to their work. The manager can change the PAMM accounts in the portfolio and the proportion of funds invested in them. When investors receive profits, the manager receives a portion of these as remuneration.
Assess the effectiveness of different portfolio managers on our site and select a portfolio to invest in. Trading is conducted on the PAMM accounts that make up the portfolio. If these accounts make a profit, so do the investors, part of which they pay to the manager for successfully managing the portfolio.
All profits and losses are strictly distributed in direct proportion to the amount of funds invested. In the above example, the manager's share is 60% (3,000 USD), and the investor's share is 40% (2,000 USD), giving a total portfolio balance of 5,000 USD.
The portfolio manager has chosen to distribute the available funds across these accounts at 20%, 30%, and 50% respectively. As such, they will invest 1,000 USD, 1,500 USD, and 2,500 USD in the respective accounts. On each of these accounts, the manager's and investor's funds are divided according to each's share in the original investment amount.
In this example, the trading results on the PAMM accounts were +300 USD, +150 USD, and -50 USD, giving a total return of +400 USD. With a 40% share, the investor's profit is: 400 × 0.4 = 160 USD. The manager's profit is 400 × 0.6 = 240 USD.
Since the manager has set the remuneration level on their portfolio at 15%, the investor will pay: 160 × 0.15 = 24 USD.
Taking the remuneration into account, the manager will earn a total of: 240 + 24 = 264 USD. This will give them a final balance of: 3 000 + 264 = 3 264 USD.
Past results are not an indicator of future performance! Alpari provides the PAMM service to managers and investors, but is in no way involved in the management of accounts. Alpari takes no part in the management of funds invested by clients in the PAMM account service.
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