{
  "slug": "fund-of-funds-fees",
  "name": "Fund-of-Funds Fee Drag",
  "category": "Fees & Structure",
  "description": "Net return after both underlying fund fees and FoF layer fees, illustrating the famous 'two-layer' fee drag.",
  "formula": "R_net = (R_gross - mgmt1) × (1 - perf1) - mgmt2; then apply perf2 if positive",
  "formula_latex": "R_{\\text{net}} = \\big[(R_{\\text{gross}} - m_1)(1 - p_1) - m_2\\big](1 - p_2)^+",
  "parameters": [
    {
      "name": "Gross return",
      "symbol": "R_g",
      "type": "percent",
      "default": 0.12
    },
    {
      "name": "Underlying mgmt fee",
      "symbol": "m_1",
      "type": "percent",
      "default": 0.02
    },
    {
      "name": "Underlying perf fee",
      "symbol": "p_1",
      "type": "percent",
      "default": 0.2
    },
    {
      "name": "FoF mgmt fee",
      "symbol": "m_2",
      "type": "percent",
      "default": 0.01
    },
    {
      "name": "FoF perf fee",
      "symbol": "p_2",
      "type": "percent",
      "default": 0.1
    }
  ],
  "outputs": [
    {
      "name": "Net return",
      "symbol": "R_n",
      "type": "percent"
    }
  ],
  "worked_example": {
    "inputs": {
      "R_g": 0.12,
      "m_1": 0.02,
      "p_1": 0.2,
      "m_2": 0.01,
      "p_2": 0.1
    },
    "expected_outputs": {
      "R_n": 0.0648
    }
  },
  "related_terms": [
    "fund-of-funds",
    "two-and-twenty",
    "high-water-mark",
    "fee-drag"
  ]
}