Buy and sell transactions in Wall Street are now dominated by rapid-fire computer algorithms, creating shorter and faster boom-and-panic cycles. Traditional fund managers are mostly engaged in easy-to-manage long-term investment, missing many these short-term investment opportunities. To take advantage of this phenomenon, Absolute Return is created to provide tight control over portfolio risk and to quickly profit from market when mis-pricing opportunities arise. Absolute Return actively trades leverage/inverse/volatility ETFs/ETNs using computer models based on extensive daily economics, fundamental and technical market data.
Following daily updated equity curve and drawdown charts are produced from Absolute Return portfolio. Portfolio return and drawdown calculations are not audited and are provided by Analytic Investment Management LLC for informational purpose only. Portfolio return and drawdown data net of custodial and trading expenses are directly obtained from one separately managed brokerage account at Interactive Brokers and reflect the deduction of annual 4% management fee on daily basis.
Past performance is not indicative of any future result. Investing in this portfolio involves risk, including the risk of principal loss. Don’t invest with money you can’t afford to lose. Standard & Poor’s 500® (S&P 500®) Index is comprised of 500 stocks representing major U.S. industrial sectors. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”). Charts and S&P 500® Index data are provided by Sheets – Google Docs.
Absolute Return systematically uses following simple yet effective investment disciplines as its core algorithms: (1) when market volatility is low or when market is undervalued, oversold, or trending up, invest in leverage long/volatility ETFs/ETNs; (2) when market is overbought or overvalued, stay in cash; (3) when recession is pending, or market is volatile or trending down, invest in leverage inverse ETFs/ETNs.
Absolute Return mainly trades following leverage/inverse/volatility ETFs/ETNs: UPRO(ProShares UltraPro S&P500)/SPXU(ProShares UltraPro Short S&P500), XIV or ZIV(VelocityShares Daily Inverse VIX Short-Term or Medium-Term ETN)/VXX(iPath S&P 500 VIX Short-Term Futures ETN), TQQQ(ProShares UltraPro QQQ)/SQQQ(ProShares UltraPro Short QQQ), and TMF(Direxion Daily 20+ Yr Treasury Bull 3X)/TMV(Direxion Daily 20+ Yr Treasury Bear 3X). Based on market conditions, however, it can trade other leverage/inverse/volatility ETFs/ETNs as well.
- Do not understand leverage/inverse/volatility ETFs/ETNs and their risks.
- Feel uneasy or even lose sleep when the value of investment accounts goes up and down with the market. Financial markets will always go up and down, and there is no way to predict how volatile future turmoil will be.
- Give up on investment and withdraw from the market after stock market crash. If the stock market suddenly collapses, this portfolio will not be spared. Those who can calmly analyze the value of the stocks after stock market crash and do timely bargain hunting are always the biggest winners in the market.
- Qualified clients only (see next section).
- Fund minimum investment US$5,000,000.
- Deduct automatically from account 20% quarterly performance fee on capital appreciation of the net asset value, subject to 10-year look-back period of high water mark, with loss prorated for withdrawals.
- California residents or non-US residents.
- Know how to open an online brokerage account, and know how to use Gmail and Google Docs.
- Investment objective is aggressive growth, investment time horizon is more than 10 years, and investment amount is less than 30% of net worth.
- Account transactions are quite frequent, up to thousands of transactions per year. The account holder is responsible for the tax filing for these transactions.
- Agree with all our legal disclaimer and disclosure.
- Agree with and sign Investment Advisory Agreement for Absolute Return Strategy.
Qualified clients, as defined by Rule 205-3 of the Investment Advisers Act and amended pursuant to the requirements of Section 418 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), are those clients with either:
A) minimum investment amount of $1,000,000 with the Adviser; or
B) $2,100,000 in net worth, except that:
- the person’s primary residence will not be included as an asset;
- indebtedness that is secured by the person’s primary residence (e.g., a mortgage), up to the estimated fair market value of the primary residence at the time the advisory contract is entered into, will not be subtracted as a liability; and
- indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time the advisory contract is entered into will be subtracted as a liability.
Pursuant to Rule 205-3, identification and proof to verify the status of qualified clients is required, including “look through” provision for certain qualified clients.