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Definition of 'High-Water Mark'
The highest peak in value that an investment fund/account has reached. This term is often used in the context of fund manager compensation, which is performance based.
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Investopedia explains 'High-Water Mark'
The high-water mark ensures that the manager does not get paid large sums for poor performance. So if the manager loses money over a period, he or she must get the fund above the high watermark before receiving a performance bonus. For example, say after reaching its peak a fund loses $100,000 in year one, and then makes $250,000 in year two. The manager therefore not only reached the high-water mark but exceeded it by $150,000 ($250,000 - $100,000), which is the amount on which the manager gets paid the bonus.
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Search results for 'High-Water Mark'
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http://www.investopedia.com/articles/mutualfund/08/fund-of-funds.asp
... Performance fees are often structured so that they have a "high-water mark", which
ensures that the manager does not receive this compensation until previous ...
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http://www.investopedia.com/articles/basics/10/are-equity-index-annuities-right-for-you.asp
... of the year, while neglecting declines; the point-to-point method looks at the change
in the index at two points in time; the high-water mark approach narrows ...
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http://financialedge.investopedia.com/financial-edge/0909/The-Markets-Primed-For-A-Pullback.aspx
... by 2014, the current 12-month reported earnings of $7.92 on the S&P 500 Index would
have to rebound to over $83 nearly back to its high-water mark back in ...
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http://financialedge.investopedia.com/financial-edge/0310/This-Week-in-Financal-History-Speculative-Bubbles-Bill-Gates-Coca-Cola-and-Capitalism.aspx
... 5,048.62. This was the high-water mark during the internet bubble. A long
plunge of 78% followed, pushing the index down to 1,114.11. ...
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http://stocks.investopedia.com/stock-analysis/2011/Eaton-Shows-Broad-Recovery-Continues-ETN-DOV-ITW-ABB-SI-PCAR-CMCO0425.aspx
... When Do the Hard Comps Arrive? Eaton's guidance for the year suggests that the
company will surmount its prior high-water mark for revenue. ...
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http://financialedge.investopedia.com/financial-edge/0809/Leveraged-ETFs-Too-Risky-For-Their-Own-Good.aspx
... future of these products. Even if they survive the hit, they may have reached
their high-water mark in terms of market penetration. ...
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http://www.investopedia.com/university/hedge-fund/structures.asp
... however. A manager only collects an incentive fee for profits exceeding
the fund's previous high, called a high-water mark. This ...
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http://www.investopedia.com/university/annuities/annuities5.asp
... High Water Mark with Look Back A simple design that will look back over
the term for the highest anniversary value over the term. ...
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http://www.investopedia.com/articles/07/amaranth.asp
... Amaranth began 2006 with $7.4 billion in assets. By August of that year,
the hedge fund was at its high-water mark of $9.2 billion. ...
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http://stocks.investopedia.com/stock-analysis/2010/Can-Apple-Stay-Fresh-AAPL-QCOM-NOK-DIS-AMZN-GOOG-HPQ0526.aspx
... That pretty much marked the beginning of the end to that run. The question
is, does this signal a similar high-water mark for Apple? ...
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