Summary

The Advisor’s approach is based on the belief that the futures markets present profit opportunities because of their nonrandom behavior. By analyzing market information within a quantitative framework, the Advisor will initiate and liquidate positions. The trading methods are mechanical in nature and incorporate a variety of trading styles. Utilizing combinations of trading strategies yields results, in the Advisor’s opinion, unattainable by any method individually.

Although the risk of loss exists in futures trading, the Advisor’s objective is to produce superior risk-adjusted returns. The Advisor looks for trading opportunities that it believes offer the potential for asymmetrically large profits relative to the level of risk assumed. The trading methods place great emphasis on the preservation of capital and the reduction of portfolio volatility. This is achieved by employing a set of risk management techniques, including broad diversification, and the adherence to a strict multiple rule based money management strategy. These rules determine the amount of equity committed to each market and sector, as well as the overall level of portfolio risk. It is the Advisor’s philosophy that managing risk is its single most important job.

The Advisor believes that a long-term commitment to its trading program is necessary for profitable results. The degree of profitability will depend upon the occurrence in the future, as in the past, of trends in some markets. Investors must give the markets ample time to develop the type of trends upon which the Advisor’s methods can capita1ize.