Investment Philosophy

The foundation of our philosophy is based on a defensive approach with a focus on capital preservation over capital appreciation. The Fund has one goal – “to deliver the most efficient risk reward ratio in all market conditions”.

Investment Objective

Our investment objective is to generate absolute returns while implementing a defensive strategy with strict risk management. The fund intends to deliver capital appreciation using a proprietary methodology utilising both system and discretionary trading.

Technical Methodology

The Trading Team uses a proprietary trading methodology implementing both systematic and discretionary trading. As an uncorrelated multi-tier strategy, it captures positive returns in a multi-directional market within the short-term, medium-term and long-term cycles.

Trades are mostly based on technical analysis for short-term and medium-term indicators and both fundamental and technical for long-term indicators.

The approach is a combination of volatility based, mathematical based and ATR (average true range) based strategy that integrates implied volatility data to determine trade entry; then the system will begin to pyramid short-term, medium-term and long-term positions with consistent and growing volatility throughout the cycles. As volume begins to drop or change direction, the positions will exit and correlated hedges are entered to offset any loss. The system is monitored 24 hours and inputs are updated daily and weekly.

In portfolio development and management, the Manager adheres to a stringent 4-step process.

1. The Trade Manager utilizes a top-down thematic approach in developing underlying themes, drivers, and exposures to the macroeconomic landscape.

2. The Trade Manager develops directional and non-directional biases in multiple foreign currency markets consistent with his top-down macroeconomic views.

3. The Trading Team constructs a portfolio of trades consistent with his above biases that offer advantageously skewed asymmetric return profiles and well defined downside risk.

4. The Trading Team consistently manages the downside risk of the portfolio while simultaneously allowing favourably performing positions to earn a larger VAR (value at risk).

Duration & portfolio turnover will vary as the Trading Team maintains flexibility to market conditions, positions trade where a specific currency pair offers a qualified edge, and in consideration for liquidity on trade entry and exits.

Risk Management

The Trading Manager has developed a framework to assess risk in totality by bringing together the assessment of all different types of risk such as, amongst others, market, operational, legal, technical, liquidity, exchange rate and regulatory.

Risk management is an extremely important component of the Fund’s trading program as the Trading Manager’s philosophy is that risk management is arguably more important than trading strategy. Furthermore, in the trading program risk can be defined and managed, whereas the potential profit of the trading strategy is totally non-deterministic.

Risk controls applied by the Trading Manager do not cover risks such as technical failure of computer systems, trading systems, network connections and Broker network connections to liquidity partners for trading. Broker insolvency and Broker activity outside the regulated authority’s regulations are also risks not applicable to risk controls. The Trading Manager or the Fund cannot be held liable for such failures, Broker insolvency or Broker activity outside the regulated authority’s regulations.