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How PAMM accounts and PAMM portfolios work

Managers

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.

Investors

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.

PAMM account breakdown

300 USD60%Manager's funds980 USDManager's funds (900 USD)plus remuneration (80 USD)520 USDInvestor's funds (600 USD)minus remuneration (80 USD)40%200 USDInvestor's funds500 USDTotal PAMM accountbalance before tradinginterval80 USD1,500 USDTotal PAMM accountbalance at the end of thetrading interval+200%+1,000 USD
  1. How much do managers and investors receive at the end of each trading interval before remuneration is paid?

    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.

  2. How are profits and losses distributed on PAMM accounts?

    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.

  3. How much do investors pay the manager in remuneration?

    The investor pays the manager 20% of their 400 USD profit, which is 80 USD.

  4. How will the manager's and investor's accounts look after all calculations are made?

    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.

Manage or invest in a PAMM account!

Invest

Managers

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.

Investors

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.

PAMM portfolio breakdown

24 USD980 USDManager's funds (900 USD)plus remuneration (24 USD)2,136 USDInvestor's funds (2,160 USD)minus remuneration (24 USD)60%PAMM account 1+300 USD+150 USD−50 USD3,000 USD1,000 USDManager's funds40%2,000 USDInvestor's funds20%PAMM account 21,500 USD30%PAMM account 32,500 USD50%PAMM account 11,300 USDPAMM account 21,650 USDPAMM account 32,450 USD
  1. How are profits and losses distributed on PAMM portfolios?

    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.

  2. How are the funds distributed across PAMM accounts in this example?

    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.

  3. How much will the manager and investor receive at the end of the trading interval before remuneration is calculated?

    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.

  4. How much will the investor pay the manager in remuneration?

    Since the manager has set the remuneration level on their portfolio at 15%, the investor will pay: 160 × 0.15 = 24 USD.

  5. How will the accounts of the manager and investor look after all calculations have been made?

    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.

Manage or invest in a PAMM potrfolio!

Invest

Attention

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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