Investment Adviser Performance-Based Compensation

On Sept. 30, 2026, the Securities and Exchange Commission proposed two rule changes which would allow performance based compensation as an option on certain registered management investment companies. Here is a link to a fact sheet of the SEC announcement about the proposed changes.

The rule changes seems to allow hedge fund like fee compensation to be paid from certain mutual funds and ETFs. I think such performance based compensation is opposite the reasons such funds came into existence.

Buyer beware if these rule changes are adopted.

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