Algorithmic Money Management
At Profluent Group, we have pioneered a new paradigm of money management. Our process, from development to execution, is completely automated, allowing for an adaptive approach to trading and drastically reducing the potential impact of human error on our portfolios.
By combining high-performance computing with bleeding-edge machine learning technologies, we were able to uncover a completely novel adaptive algorithmic approach to financial modeling. This discovery has allowed us to create robust and highly accurate models for a variety of futures, FX, equity, and cryptocurrency markets.
As finance becomes increasingly computerized, traditional investment approaches simply will not be able to compete with the zetaflop processing capacity of the most advanced trading firms. We offer a solution that does not rely on raw power and connection speed, like many HFTs, but generates alpha through intelligent computing, producing a robust long-term source of absolute return.
We utilize intelligent money management algorithms, never risking more than 1% of the portfolio on any single trade. Our systems automatically adjust to changes in volatility across multiple markets, preserving investors' capital in times of crisis. Coupled with a diversified approach in assets, strategies, and trading venues, we offer a superior approach to risk management and capital preservation.
Unlike traditional asset managers, we are active in all major markets across the globe. Our portfolios include foreign exchange, financial, and index futures, as well as energy, metal, and agricultural futures as well. We even employ market making strategies in the cryptocurrency markets. All of this allows us to offer our clients a level of diversification unparalleled by all but the most sophisticated traditional asset managers.
We also offer hybrid models that give our clients access to US and European equities, allowing us to generate alpha even in the years when buy-and-hold strategies perform extremely well.
Long-holding-period strategies like buy-and-hold and long-only equity portfolios expose investors to unnecessary risks and are difficult to evaluate statistically due to the small number of signals involved in trading these methods. We use a short holding period to ensure that we are always able to liquidate our portfolio if any global price shocks occur. We exit most of our positions by the end of the trading week, to prevent holding assets while the markets are closed. This also allows us to offer our clients shorter lock-up periods than traditional investment vehicles.
Because of our ability to diversify across asset classes and geographies, we offer a portfolio with a low correlation to traditional asset managers and common equity indexes like the S&P500. It seems that nowadays, every asset class is significantly correlated to the equity indexes. We offer a long-short balanced portfolio that performs regardless of the state of the equity markets.
Cash & Tax Management
Because we profit from economic inefficiencies in the markets, and those do not occur often, we often hold a significant cash position. This means that, for a significant portion of the trading year, our portfolio is 100% cash. This cash is invested in short-term U.S. government securities in order to keep our customers' funds safe and secure while producing extra returns in the process.
There is also an advantage to futures and FX trading that is almost never mentioned in traditional financial media. That is the 60/40 rule, where 60% of profits from trading are treated as long-term capital gains and 40% are treated as short-term capital gains. This translates into thousands of dollars of tax saving per year for our clients.