Many, many thanks Cav. This will be very helpful for Methodologists to design more profitable projects. @prairiefi and I will update the product profit model to include the gas fee split arrangement, the move to 100 bps trades, and adding/removing components.
I have one suggestion. I think we have a duty to disclose the NAV decay of our composite index products to our customers. With the move to 100 bps trade sizes (which I support), the NAV decay will now be substantial. For example, for a project with 25% monthly turnover, the NAV decay will 0.25%/month or 2.96%/year because the decay is compounded. This is much larger than a typical streaming fee. For easier communication the NAV decay could be combined with the streaming fee into an “Expense Ratio” as is typically done for equity funds. For the above example, if that product had a streaming fee of 1.95% then the Expense Ratio would be 4.91%/year.