Fees

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Overview

ETFT fees distinguish ongoing product expenses from the costs of an individual primary-market transaction. There is no separate Alloco mint fee. Holding an ETFT may incur management fees, applicable performance fees, and other disclosed product expenses. Minting and redeeming may also incur order-specific execution, conversion, network, and applicable redemption charges. This page covers ongoing product expenses and Mint and Redeem transactions. Secondary-market Buy and Sell transactions follow the relevant venue’s fee schedule and do not automatically use the primary redemption fee schedule. Costs fall into four categories:

1. Ongoing operating expenses: management fees and other disclosed recurring operating expenses borne by the product.
2. Performance fees: performance-based compensation where expressly provided in the product terms.
3. Portfolio trading and holding costs: execution, rebalancing, financing, borrowing, funding, conversion, and applicable taxes borne by the portfolio.
4. Investor transaction costs: charges attributable to a particular mint, redemption, or wallet action, including applicable redemption fees and network gas.

A cost’s allocation determines whether it affects the product as a whole or an individual order. The same cost is not charged through both routes.

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Fee summary

A zero mint fee or redemption fee does not eliminate other costs. The quote and transaction breakdown identify applicable charges and distinguish estimated amounts from final execution results.

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Ongoing Expense Ratio

Alloco uses Ongoing Expense Ratio to describe management fees and other eligible recurring operating expenses borne by an ETFT, expressed as an annual percentage of its average net assets. This is Alloco’s defined disclosure measure; it should not be assumed to have the same scope as every ETF expense ratio or total expense ratio published elsewhere. For a complete one-year reporting period: $$\mathrm{OER}=\frac{\text{Management fees + eligible recurring operating expenses}}{\text{Average Product Net Assets over the same period}}$$ The numerator uses expenses recognized for that period, including applicable accruals, rather than only cash payments. The denominator is total Product Net Assets, not Product NAV per Unit. The reporting period and averaging method must be disclosed. Any shorter-period annualization is identified with its calculation basis.

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Included and excluded costs

Expenses included in a management fee are not counted again as separate operating expenses. Costs of underlying investment products, where applicable, must be identified as embedded costs or included on a disclosed look-through basis; they must not be silently treated as zero or counted twice. The Ongoing Expense Ratio is not an all-in cost of ownership. Excluded costs can still reduce Product NAV or an investor’s transaction proceeds.

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Estimated and historical figures

An Estimated Ongoing Expense Ratio uses the disclosed operating budget and asset assumptions. Actual expenses can differ, particularly where fixed costs are spread over a changing asset base. A Historical Ongoing Expense Ratio uses recognized expenses and average net assets for the stated reporting period; it is not a promise of future costs. Where the other operating expenses have not been established, the management fee is shown separately rather than presented as a complete expense ratio. Any fee waiver, subsidy, or expense cap must identify its scope, duration, exclusions, and any permitted later recovery. An estimate is not an expense cap. For illustration only, a 0.50% management fee plus estimated eligible operating expenses of 0.10% on the same annual net-asset basis gives an estimated Ongoing Expense Ratio of 0.60% p.a. The management fee is included in that figure, not charged on top of it. Performance fees and the excluded costs remain separate.

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Mint fee

0% Alloco does not charge a separate product fee when you mint an ETFT: $$F_{\mathrm{mint}}=0$$ Minting nevertheless requires the underlying portfolio exposure to be established. Brokerage charges, spreads, price impact, required conversions, and other applicable costs can affect the units received.

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Management fee

Each ETFT has an annual management fee within the 0.5%–2.0% p.a. range. The applicable rate is disclosed on the product page. The management fee compensates for ongoing product management and the services specified in the product terms, which may include methodology maintenance, monitoring, rebalancing oversight, operational infrastructure, and administration. Services covered by this fee must not also be charged as separate operating expenses. It is accrued over time rather than charged as a separate upfront mint payment.

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Accrual

Using a daily accrual and a 365-day convention, the calculation can be represented conceptually as: $$\Delta M_d=B_d\times\frac{m}{365}$$ where: For example, an illustrative USD 1,000,000 fee base at 1% p.a. produces approximately USD 27.40 of daily accrual under this convention. The product terms define the fee base, day-count convention, and accrual timing.

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Effect on Product NAV

Accrued unpaid management fees, applicable performance fees, and other recognized unpaid product expenses are product liabilities. They reduce the net assets attributable to holders: $$NAV_t=\frac{A_t-L_t}{N_t}$$ Here $A_t$ is attributable product assets, $L_t$ includes accrued fees and other liabilities, and $N_t$ is the corresponding economic unit count. Paying a fee that has already been accrued settles the liability; it is not a second deduction from NAV. Management fees, performance fees, and other expenses already reflected in NAV are not deducted again as an order-level charge when minting or redeeming.

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Reference performance and product value

Reference Portfolio Value represents the theoretical performance of the defined reference portfolio. It excludes product management fees, performance fees, other product operating expenses, and actual product execution costs. Any modeled taxes, funding, financing, or trading costs are specified in the reference methodology. A series adjusted for modeled product fees is separately labeled Fee-Adjusted Reference Portfolio Value and remains a theoretical reference, not Product NAV. Product NAV means Product NAV per Unit: actual attributable assets less liabilities, divided by the corresponding economic units outstanding. Indicative Product NAV (iNAV) is an intraday estimate using the latest available product records. Daily Product NAV is calculated for the specified daily valuation point and published after reconciliation. Both iNAV and Daily Product NAV reflect applicable accrued management fees, accrued performance fees, and other recognized product expenses and liabilities using the records available at the relevant valuation point. Reconciliation may update estimates. Daily Product NAV is not iNAV with those fees deducted again. Deducting modeled fees from Reference Portfolio Value does not reproduce actual Product NAV, which also reflects actual positions, cash, taxes, funding, execution, and other accounting items.

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Performance fee

Some ETFTs, particularly Manager-Led ETFTs, may charge a performance fee. It applies only where expressly disclosed in the product terms. There is no platform-wide default performance-fee rate, and the presence of a Captain does not itself create a performance-fee entitlement. A performance fee is calculated on the eligible performance defined by the product, not automatically on all assets or every increase in market value. Its percentage cannot be added directly to an annual management-fee rate because the calculation bases differ.

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Required product disclosures

A high-water mark, hurdle, or particular settlement frequency is not assumed unless specified. The disclosed method must address how investors entering at different times are treated, including any equalization, series, or other attribution mechanism used to avoid charging new contributions for earlier performance.

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Accrual and Product NAV

Applicable performance fees are recognized as they accrue under the agreed methodology, rather than first appearing only when paid. Uncrystallized accruals are recalculated, and reduced or reversed where required by that methodology, as eligible performance changes. A reversal of a provisional accrual is distinct from a refund of a fee already crystallized. Paying an already accrued fee reduces cash and settles the corresponding liability; it does not reduce NAV a second time. Redemption-related crystallization and attribution must also avoid duplicate charges. For illustration only, if eligible gains are USD 100,000 after all applicable prior costs, loss recovery, and performance conditions, a 20% performance fee would be USD 20,000. This example does not establish an actual product rate or a 20% charge on total assets. Performance fees are excluded from Alloco’s Ongoing Expense Ratio and disclosed separately. Any historical performance-fee expense expressed as a percentage of average net assets must identify its period and basis; it is not a fixed forward annual fee.

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Other operating expenses

A product may bear specifically disclosed expenses for administration, custody, accounting, audit, legal services, valuation, data, licensing, or reporting. These examples do not authorize every category to be charged to every ETFT. The product terms identify the permitted categories, allocation basis, and any limits. Platform overhead is not automatically a product expense. Shared costs must use a documented, consistently applied allocation basis, and services already covered by the management fee are not charged again. Fixed expenses can represent a larger percentage of net assets for a smaller product. Any minimum charge, product-borne setup cost, exceptional expense, or cost cap must be disclosed separately where applicable. Non-recurring expenses are excluded from the Ongoing Expense Ratio defined above but still affect NAV when recognized. Expenses are reflected in NAV as recognized under the product’s accounting methodology. Paying a previously accrued expense settles its liability without a second deduction. Expenses absorbed by Alloco or another party are not treated as borne by the product unless a disclosed reimbursement arrangement applies.

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Redemption fee

The redemption fee depends on the holding period of the units being redeemed. For units subject to a single fee rate: $$F_{\mathrm{redeem}}=G_{\mathrm{redeem}}\times f$$ Gross proceeds already reflect the prices achieved in execution. Spread or slippage embedded in those prices is not added back to create an artificial gross amount or charged again as a separate deduction. For example, gross redemption proceeds of 1,000 USDC subject to a 0.10% fee incur a 1 USDC redemption fee. Other applicable transaction costs are accounted for separately, without duplication. Where multiple acquisition lots have different applicable rates, the fee is calculated using the gross proceeds attributable to each lot: $$F_{\mathrm{redeem}}=\sum_{\ell}G_{\ell}f_{\ell}$$ This is a primary redemption fee. It does not automatically apply to a sale of existing ETFT units on a secondary venue. A secondary acquisition also does not automatically qualify the acquired units for fee-free redemption.

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Underlying execution costs

ETFT minting and redemption are execution-backed. Establishing or reducing the corresponding underlying portfolio can generate costs that vary by product, order size, market conditions, and trading session.

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Brokerage and venue charges

Underlying securities execution may incur charges based on the applicable brokerage arrangement, number of shares, execution tier, order type, session, and security. Pre-market, post-market, and overnight execution may have different cost structures from regular-session execution. The applicable charges form part of the request’s execution economics; they are not a separate Alloco mint fee. For products using derivatives, venue trading fees and other relevant execution charges follow the product’s implementation and fee disclosures.

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Spreads, slippage, and market impact

These are economic effects of execution, not automatically separate fees charged by Alloco or the broker. Execution analysis may distinguish: $$C_{\mathrm{economic}} = C_{\mathrm{explicit}}+C_{\mathrm{implicit}}$$ Explicit costs include separately charged brokerage or transaction fees. Implicit costs describe differences between an appropriate reference price and the achieved execution price. This expression is an analytical decomposition, not an instruction to deduct every component again from actual proceeds. If actual fills already reflect spreads and price impact, those effects are not subtracted a second time. Different slippage and spread measurements can also overlap and must not be added mechanically.

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Regulatory and third-party charges

Applicable transactions may incur regulatory, exchange, settlement, or other third-party charges. Charges attributable to a particular request may be passed through under the product’s execution methodology. Expenses associated with portfolio operations, corporate actions, or taxes may instead belong to the product as a whole. Their allocation follows the product terms rather than automatically charging them to the next user who mints or redeems.

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Rebalancing and ongoing portfolio costs

A management fee does not imply that every underlying rebalance is free to execute. Where the product bears rebalancing costs or other disclosed ongoing expenses, they affect Product NAV. For derivative-based ETFTs, funding payments may be payable or receivable, and financing or borrowing costs may apply. Their treatment follows the product methodology. Amounts already recognized in cash or liabilities must not be recorded again as additional costs.

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Stablecoin and currency conversion

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Minting with USDT

You can fund supported mints with USDC or USDT. USDT is automatically converted into USDC before the underlying execution process. Conceptually: $$U_{\mathrm{USDC}} = U_{\mathrm{USDT}}x_{\mathrm{swap}}-K_{\mathrm{swap}}$$ If the reported conversion output is already net of those costs, use that output directly. Do not deduct the same costs again. Conversion rates are not assumed to be one-for-one, and spreads, fees, and slippage can reduce the amount available for minting. The 100 USDC mint minimum is tested after USDT conversion and its costs, before underlying portfolio execution costs. Network gas does not count toward the minimum.

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USDC and USD

U.S. securities are priced and executed in USD. When the funding or settlement route requires conversion between USDC and USD, the achieved rate and any applicable conversion charges form part of the transaction economics. Costs already reflected in a net conversion rate or net settlement amount are not deducted again. A USD NAV and a USDC payment amount should not be treated as identical without applying the relevant conversion basis.

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Redemption asset

Primary redemptions deliver USDC, including when the original mint was funded with USDT. Earlier USDT conversion costs are not reversed by a later redemption. USDT mint support does not imply a USDT redemption option.

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Execution buffers and remaining funds

Alloco’s U.S. equity execution policy uses marketable limit orders with price protection. An execution buffer provides limited room for market movement; it is not a fee and is not automatically charged in full. A limit price defines the permitted execution boundary. Final pricing reflects actual fills and disclosed costs, even when execution occurs at a better price than the limit. Any funds reserved for potential costs remain subject to reconciliation. After a successful mint, USDC that was neither used to establish the issued entitlement nor included as cash backing that entitlement is returned under the order terms. A legitimate product cash allocation remains part of the product exposure. Unused buffer amounts are not platform revenue. See Trading hours & order execution for price limits, execution windows, and partial-fill handling.

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Network fees

Supported onchain actions on networks such as Ethereum and BNB Chain may require gas, including:

• Token approvals where required.
• Submitting a mint or redemption request.
• Claiming ETFT tokens or USDC.
• Transferring supported tokens.

Network fees are determined by the applicable blockchain and network conditions, rather than being an Alloco product fee. Depending on the route, separate actions can require separate transactions. A failed or reverted onchain transaction may still consume gas. A USDC or USDT balance alone does not necessarily cover gas; the network’s native token is normally required unless a supported route expressly sponsors the charge. Any separately charged service or delivery cost must be identified separately from network gas.

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How costs affect a mint

Before submission, the Mint Quote shows estimated ETFT output, applicable minimum output, estimated costs, and quote validity. The quote is specific to the order; neither Reference Portfolio Value nor iNAV is a guaranteed mint price. After any required USDT conversion, the amount available to establish the corresponding product exposure reflects the actual USDC conversion output and applicable order-specific costs. Final units are established under the product’s issuance and accounting methodology using the applicable product valuation and actual execution results. The Final Mint Outcome identifies:

• The confirmed ETFT units issued.
• Actual conversion and execution costs attributable to the order.
• Any remaining USDC returned under the order terms.

USDC included as product cash backing the issued entitlement is distinct from unused funds returned to the investor. Reserved but unused execution buffers are not platform revenue. Costs embedded in actual fills or net conversion amounts are not deducted again as separate charges. Accrued management fees, accrued performance fees, and historical product costs already reflected in Product NAV are not charged again as the same order-level expense. See Pricing & NAV for the valuation and unit-accounting principles that distinguish a Mint Quote from the Final Mint Outcome.

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How costs affect a redemption

Using gross proceeds based on actual execution and the applicable settlement conversion: $$U_{\mathrm{net}} = G_{\mathrm{redeem}}-K_{\mathrm{redeem}}-F_{\mathrm{redeem}}$$ For illustration: The example is hypothetical and excludes separately paid network gas. At a 0% redemption fee, the same gross proceeds and other charges would produce 998 USDC. Net USDC becomes Claimable when the required execution, reconciliation, and funding steps are complete. An underlying fill alone does not establish that the funds are immediately available for delivery.

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Avoiding duplicate charges

The transaction and valuation methodology distinguishes costs already reflected in value from costs still to be deducted: Market movements, liquidity conditions, source differences, and the timing of execution can change the final amount without representing additional Alloco fees.

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Exceptions and incentives

If execution is incomplete or cannot satisfy accepted limits, the request follows the disclosed exception policy. Completed conversions or trades may generate costs even when the original request does not complete normally. Alloco bears additional remediation costs caused by platform technical errors. Other exceptional costs follow the terms disclosed before acceptance and are not automatically transferred to other ETFT holders. Participation rewards or fee credits do not waive charges unless the published program expressly identifies the charge and benefit. A proposed liquidity-partner arrangement is not an automatic exemption from the standard redemption schedule.

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Related documentation

• Pricing & NAV: reference performance, product valuation, and order-specific pricing.
• Minting an ETFT: contribution assets, quotes, and claiming issued units.
• Redeeming an ETFT: redemption requests and USDC delivery.
• Trading hours & order execution: market availability, price protection, execution deadlines, and exceptions.
• Secondary markets: trading existing ETFT units and venue-specific costs.

Review the applicable product rate and transaction breakdown before confirming. Ongoing expenses, applicable performance fees, portfolio costs, transaction charges, and market performance are separate inputs to the overall result of holding an ETFT.