AOS Compensation Structure- NO Fees!
AOS Compensation Structure – NO Fees!
To Fee or Not to Fee
We’ve previously released articles that detail how one of the advantages of investing with the AOS family funds is that there are no fees associated with doing so. What makes that possible? It’s because the company makes its money from the same royalties that the investor does.
But that was a bit simplistic in detail so I wanted to expound on that a bit.
You’ll hear us say over and over that at AOS, we believe the secret in life is to not be too greedy. It’s a fundamental principle of our business and one we adhere to strictly. This principle extends to our own compensation.
Thus, our compensation structure is extremely modest. This allows us to provide greater returns to you, the retail investor.
Compensation Structure Explained
This modest compensation structure includes:
No load funds: No upfront or back-end management fees when you’re investing in, or exiting from, your AOS-sponsored investments1
Strict elimination of unnecessary overhead: AOS strives to ensure that each AOS-sponsored fund is run with “thin” overhead, reducing operating costs to the lowest level possible. We do so by ensuring:
- There are never more than two staff members (both of whom serve as executive officers of the fund) at the fund level. Instead, all day-to-day management functions are performed by AOS Management LLC (“AOSM”). This relieves the funds of the necessity of having to “staff-up” in order to conduct day-to-day operations.
- Balanced against this “flat” staffing, each fund has its own, independent Board of Directors. Each of these boards is charged with directing policy and controlling all important decision-making. In consideration for their service, each Board member receives a small honorarium ($200) for each regular monthly, or special, meeting they attend.
- Absent prior shareholder approval, AOSM’s compensation will never exceed $60,000/month. This single monthly fee is paid by the funds collectively. That means each fund contributes its pro rata share based on the number of funds then outstanding. For example, if there are five funds outstanding, each fund would pay 1/5 of the fee, or $12,000 per month.
Modest management compensation
Without prior fund shareholder approval:
- There will never be more than twelve managers managing the AOS-sponsored funds.
- No manager will ever receive more than $5,000 per month in compensation (which includes both salary and bonus)2. In fact, many will be receiving compensation at substantially lower levels.