I'm considering investing in a SMA because:
1. I like the concept of owning the underlying stock, and
2. Minimising transactional costs using aggregation and netting with other SMA accounts.
The fees for the SMA I am considering seem acceptable at about 1.6%, however, I am unconvinced about the performance fee because it is calculated monthly on a basis of 10% outperformance of a benchmark index. Whilst losses are carried forward it seems likely that a performance fee will be charged during the good months wheras over say a 12 month period there may be no outperformance of the benchmark at all.
Has anyone have either good or bad experiences with SMA's?