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What is a high-water mark? How a performance fee works

Melvin van Oosten, founder of Gold24·28 September 2026·5 min read

Short answer

A high-water mark is the highest level your account previously reached. You only pay a performance fee on profit above that level. If your account falls first, that loss must be recovered before any fee is charged again. So you never pay twice on the same gains.

Key points

You only pay a performance fee on new profit.
After a loss you pay no fee until the loss is recovered.
Deposits and withdrawals are taken into account.
At Gold24: 25% performance fee, no sign-up fee.

What is a performance fee?

A performance fee is a charge you only pay when the strategy makes a profit. There is no fixed annual management fee. The manager only earns when you earn, which keeps interests aligned.

How does a high-water mark work?

The high-water mark is the highest level of your account on which a fee has already been charged. A new fee is only due on profit above that level. If your account falls, the high-water mark stays where it is. The account must first climb back above it.

Worked example

You start with €1,000. In month 1 your account grows to €1,200. On €200 profit you pay 25%, so €50. The high-water mark becomes €1,150 (the level after the fee).

In month 2 the account drops to €1,050. You pay nothing. In month 3 it rises to €1,250. You only pay on the part above €1,150, so on €100: a €25 fee.

Put simply: if your account earns €1,000 of fee-eligible profit, the fee is €250 and you keep €750.

What happens when you deposit or withdraw?

Deposits and withdrawals don’t count as profit or loss. If you add €500, the high-water mark rises by the same amount. If you withdraw, it falls proportionally. So you never pay a fee on your own deposit.

What are Gold24’s costs?

No sign-up fee or subscription.
25% performance fee on new profit, with a high-water mark.
Possible broker trading costs, such as spreads.

Frequently asked questions

Do I pay a fee if my account makes a loss?

No. You never pay a performance fee on losses. And after a loss, you only pay a fee again once the loss has been recovered.

Is a high-water mark standard?

It is common for professional strategies and funds, but not universal. Always check the terms before you join.

When is the fee calculated?

That is set out in the PAMM strategy’s terms. You see the exact terms before you confirm the connection.