What is the method, formula for calculating management fees?

For each custody or strategy balance, we track the ending balance each day converted to USD using an end-of-day price ( Abra also tracks the in-kind balance daily but it isn't used in the fee calculation).

Abra will then sum up the daily balances and divide by the number of days in the month to calculate the average daily balance in USD. The monthly fee is simply that value multiplied by the monthly fee rate (1/12 of the annual fee rate) for that balance which can vary for custody or specific strategies.

For example, the custody AUM fee is 0.5% annually. Strategies can be either 1.00% or 2.00% annually. If you open your account part way through the month there will be fewer values in the total but we will still divide by the number of days in the full month so that is how it gets pro-rated for the initial partial month. We round up for both calculating the daily balance and the management fee.

As an example, the daily balance in custody (0.5% annual AUM fee) is 1,000,000 and for 30 days it is 1,000,000, then the management fee for that month is 1,000,000 x 30 / 30 x (0.5% / 12) = $416.67 for that month. Because we round up the monthly fee percentage (0.5% / 12), in this example, it will be rounded up to 0.0417%. Therefore, the calculated fee in our system will be 1,000,000 x 30 / 30 x 0.0417% = $417.