Dear
Investor,
We
hope this newsletter finds you well. Happy Canada Day to all of our Canuck
friends, and an early happy Independence Day to all of our American
friends. We offer our condolences to
those in the USA
who have perished because of, and those who are still struggling through the
power grid failures and scorching heat waves. We sure hope it leaves just as
fast as it came!
We
have some rather big and exciting news to present this month. After much
contemplation, it is with mixed feelings that we are handing the management of
our long running Managed Accounts over to two other independent parties to
manage. As many of you know, we have been working diligently to bring our own
brokerage to fruition over the past 6-9 months and are now in the final stages.
It has been a mammoth of a task thus far, and it has taken tremendous amounts
of time and resources from us to complete properly. Due to this, we are down to 1 full time
programmer for the Managed Accounts as apposed to 3-4 which we originally had
full time dedicated to this. We had to bestow these guys over for extra assistance
to focus all efforts on the brokerage helping tackle many long-standing pending
tasks.
Our
resources are being spread very thin as well as the brokerage is taking up a
large amount of our time and efforts in this final push to tie up all lose
ends. So due to this and also the fact that
we have fewer technical resources available for the managed products at this
point in time, after much discussion, we feel it would be in everyone’s best
interest to outsource trading at this point in time. If we cannot commit to
something 100%, we really do not like doing it, and we feel that at this point
in time with our resources being stretched between the brokerage and the
managed products, we need to consolidate our efforts to focus on one thing. We
have been thinking about this for a long time and have just this month decided
to reinforce this. The only problem is
that we also have a hard time trusting other managers (we have been down this
road before), and we are very very very picky in selecting someone who would be
able to help with the management of the accounts. That being said, we do
believe that we have found what is in our opinion the “best fit”, and after
much due diligence we are planning to make a transition, at least for a while,
but we feel that this may be something that develops into a long-term plan. So
who is taking the reigns …?
We
have identified two managers who in our view are both very professional and
good at what they do and who will be an excellent fit and great for
diversification when used together. We have spent quite a bit of time with them
going over their trade strategies in detail, and going over their trade by trade
reports and 3rd party audits. We were so impressed with both, that we have
invited them to trade at our in house brokerage as well on our institutional
feed (which they are thrilled to do). As part of this agreement, we have asked
if they would be able to assist us in the management of our managed products
while we focus all efforts on providing the trading service at the brokerage
for the time being. They have both agreed, and some brief details for these are
provided herein for your reference. One of the programs named P-FX is very
conservative. The other named S-FX is more aggressive in nature. So between the
two there is something that should cater to everyone. They work very nice
synergistically together, and we encourage all investors interested in participating
to split their funds between the two, either 50/50 or up to 70/30 in favor of
one or the other based on your risk tolerance. Here are some quick details
about the two programs…
P-FX (conservative):
this is one of
the more spectacular strategies that we have come across to date. They have
NEVER had a client leave due to being unhappy with their performance! This is
rare in the FX world. Most clients in
this program are larger institutional style investors. They have been managing client
funds for over 3 years, and have had only 2 small losing months to date (so
that is 2 losing months out of 40 months). They are managing just under $10M,
and their profit targets are 30-60% per year. They maintain a Sharpe ratio of
4.32. We have implemented a max drawdown
cap at -15%, although it hasn’t even reached half of that in over 40 months. The worst peak to valley draw has been -6%. Needless
to say, this is one of the safest and best managed accounts we have seen during
our time in the FX arena. Shamefully we
must admit that we would love to be able to trade this good ourselves someday.
This is the perfect strategy for those who want long-term safe and stable
moderate gains, year after year. Again this too is not common to find in the FX
industry. Most go through periods of highs and lows. Not this one. Those
interested in a detailed breakdown on the strategy and performance please
contact us. We will update these details to our website over the coming week.
All performances have been reviewed by our team, but also 3rd party
audited and verified by a reputable American CPA. This program is ready to go,
and is now trading at the large, fully regulated, well capitalized FSA
brokerage in London, UK that we use. It will also be trading at our brokerage
once fully structured as well. Capsule performance is attached to this email.
S-FX (aggressive):
this is the more aggressive strategy of the two. It has been managing the trade
team’s funds for the past 2 years and client funds for the past 14 months. During
this 14 month period it has banked over 990% in cumulative compounded profits
averaging approx 19% per month. This is a combination of 3 diversified strategies,
managed by a team of 3 traders, all balanced and funneled into one final
trading strategy. Remember on the
Managed Accounts all 3 are traded at once to diversify it and produce a
smoother equity curve. This program targets aggressive profit targets and as
such, larger drawdown’s are to be expected as well. The program carries a
floating drawdown trailing equity most of the time in the 5-7% range and it
trades very frequently. The maximum equity drawdown is capped at 30% by the
trade team. This presents an excellent
opportunity for expedited growth, but of course not without the expense of
additional risk. That being said, they have had only 1 losing month in the past
14 months which was only -1.90%. This is highly impressive to us personally
given the overall state of the markets this past year. We like that it is
pre-diversified as well. For those looking for aggressive growth and profit
targets with controlled risk, this is about as good as it gets. The strategy is
very brokerage friendly, and not predatory, so in our view it has potential for
a long future to continue pumping out further (well above average) great performance.
This strategy is also ready to go and trading at our fully regulated, well
capitalized FSA brokerage in London,
UK for any
parties interested in participating. Capsule performance is attached to this
email.
We
feel that both of these programs when used together provide a very nice
diversification avenue for clients, especially since we have a very wide range
of clients – both those targeting aggressive growth, and those targeting
conservative growth. Of all the programs and traders we have looked at and
worked with in the past, we feel these are two of the strongest and most
professional and successful and we will certainly have these running at our
brokerage soon as well. We feel that this move will be the best way forward at
least in the short term, as we focus on structuring more traders at the new
brokerage. We feel over time while our efforts remain focused on providing the
trading platform service we will have more top managers available for clients
to participate with, making a win-win scenario from this. We will still be the
main point of contact for our managed accounts, and we as always remain
available to help or answer any questions you may have regarding this or any
other matters. Please do not hesitate to contact us if you have any other
questions or concerns. We will be
updating our website over the coming days to reflect the new programs. Any
interested parties please feel free to contact us.
Warm
Regards,
Cayo
Flow Team
