PROFIT SHARING SHEME
Profit sharing is a form of investment cooperation for customers who seek outstanding profitability targets and willingly bear risks from ineffective investing. With this form, investors will share both profits and risks with Passion Investment.
- The hurdle rate is 6% per annum.
- Clients receive 80% of the exceeding profit when the rate of return is greater than 6%.
- With this form, Clients share both profits and risks with PI hence when the Trading account is not profitable, clients bear all the risks.
- Contract duration: 1 year with possibility of renewal.
DEMONSTRATION OF COOPERATION FORM
Customer A decides to set up cooperation with Passion Investment. After the cooperation period matures, the two parties will calculate investment performance and the following scenarios will occur:
- Scenario 1: If the rate of return is 0-6%, the entire profit will be given to Customer A.
- Scenario 2: If the rate of return is 20%, 6% will be given to Customer A and the remaining 14% will be divided 80-20. He will take 80% on the surplus (or 11.2%) and Passion Investment will keep 20% on the surplus as performance reward fee (or 2.8 %). Finally, Customer A earns a rate of return of 17.2%.
- Scenario 3: If the investment takes a loss, Customer A will bear all the loss.