Managed accounts - the intelligent alternative to traditional hedge funds and security accounts. Low risk and high yields. 100% investment protection if the manager becomes insolvent. Account held by a well-known international investment bank. Can be terminated quickly

To simplify matters a managed account is a private investment account that is run by a professional trade advisor and the help of computer-operated trading systems.

VATAS offers managed accounts to its customers via its well-known partner Falcon Asset Management GmbH.

Managed accounts are considered to be alternative investments or hedge funds. But in contrast to hedge funds, since they are operated as individual accounts in the investor's name and therefore eliminate the restrictions of a collective investment, they offer more advantages that can be heavily exploited.

The main advantage is the ability to adapt quickly to changes in the market. If the market changes direction the managed account can modify its strategy quickly and easily because a managed account can focus on falling or rising prices as desired.

We are currently observing a noticeable turning away from hedge funds and security accounts to computer-operated managed funds. We invite you to successfully exploit this trend at an early stage.

Take advantage of our experience!

Trust us. Managed Futures
"Managed futures" refers to a professional, often global and systematic trading strategy (trading systems) using exchange-traded future contracts (futures) both with short and long positions. The fundamental target structure can be brought down to a simple formula: positive absolute returns for each year.

That is also the significant differentiating feature to traditional investments such as investment funds. These are linked to the development of a market or index. When share prices are rising the development of the fund's value is also generally positive. But if the index moves down e.g. by 15% the fund manager has also fulfilled his requirements if the portfolio he manages does not lose more than 15% of its value in the same period. In contrast managed futures managers are always striving for a positive annual yield. They achieve this by such methods as using so-called trading systems.

What are trading systems?
Trading systems represent a closed set of rules for generating stock market signals. These rules attempt to model the market and how it works and must be objective, logical and operational. Therefore the decision-making process is not subject to personal or emotional criteria and can be checked at any time. The use of trading systems is also referred to as quantitative trading. In contrast it subsumes all non-quantitative decisions as intuitive or qualitative trading.

Why are trading systems for quantitative decision-making instruments preferable to intuitive decisions?
Quantitative models exceed forecasts produced traditionally by people for reasons that include applying the same criteria in the same way reliably at any time without hesitation. In virtually all cases it is the absolute reliability in implementing the model that causes better performance. A clearly defined and operational trading strategy that is complied with constantly and in a disciplined manner, is the key to success.

What effect does the use of trading systems have on an investment portfolio?
The integration of trading systems increases investment efficiency. In particular with the background of historical lows for shares and volatile movements in the securities markets, the involvement of even a low share of trading systems can result in a significantly higher return-risk ratio. This means sustainably improving the total yield of the investment portfolio and also noticeably reducing the risk. The positive effect is not only in the low correlation with such traditional investments as shares and bonds by which a highly diversified effect is achieved for the whole portfolio. Trading systems are also characterised by benefiting from both rising and falling markets and creating additional profit opportunities.

Do these statements have a scientific basis?
Trading systems are a fixed element of an investment portfolio under the term managed futures within modern portfolio theory. American Nobel prize-winner Harry Markowitz (Nobel prize for economic sciences 1990) produced scientific evidence that the diversification of investment types has a low correlation for reducing the risk of an investment portfolio.

In addition, Harvard professor John Lintner showed that the yield of a portfolio could be improved significantly by including some managed futures (trading systems) whilst maintaining the same risk. Investments in trading systems are therefore ideally suited to complementing the professional and strategic investment portfolio with an investment that improves returns.

The following example of an "efficient frontier analysis" shows a classical share/bond portfolio (40%/60$) with the addition of managed futures. All the portfolios in the graphic are "efficient portfolios", i.e. portfolio combinations that have the lowest risk for each return/risk ratio whilst at the same time producing the highest return. The "ideal" portfolio, i.e. the one with the lowest absolute risk, contains 20% managed futures. Compared with the pure share/bond portfolio, this one has returns that are around 7% higher whilst the risk is around 10% lower.

Daten (01/80-12/2000): Managed futures: Managed futures: CTA index (Tremont/Tass), shares: Dow/Dax/ Nasdaq, bonds: Lehman Government Bond Index

How are trading systems implemented in the investment portfolio?
We develop trading systems and use them on US and German futures markets. The most important objectives are to reach above-average capital returns compared with investments that have a comparable risk and to realise returns that are as independent as possible from the development of the share markets, i.e. to create an absolute return.

What is the key difference between our system approach and most other suppliers?
In some markets we trade several systems and thus achieve higher diversification and a smoothing of the capital curve. Our systems are robust. The statistical significance of the historical performance falls strongly if robustness is not considered during development. We understand robustness to mean the likelihood that the future development of the systems will continue to be profitable in the future. We have progressive money management. This means that when you trade and also how much you trade is precisely defined.

Important: Psychological profile of a managed account
The strategies used are exclusively so-called trend-following systems. These strategies have proven to be the most successful. They do however have characteristics that do not suit every investor.


Please note...

• Many smaller losses and a few larger profits.
  The hit rate, i.e. the relative number of profit trades to loss trades, is relatively low. It is typically only between 30 and 40% whereby 6, 7 or more incorrect trades in sequence is nothing unusual. The profit trades generally exceed the loss trades by multiples so that the strategy pays off as a whole.
• The high is always sold and the low purchased!
  This may sound absurd at first but is however the core thesis of those following trends. The purchase is expensive to that it is possible to sell at an even higher price or sold cheaply so that it can be bought back even more cheaply. Why? Because strong rates usually indicate a bull market and weak rates a bear market. Many people do not like selling something that has already "risen a lot" and are not comfortable with such a strategy.
• Apparent profits are sometimes "returned"!
  One of the most difficult features of trend-following systems is that they never close a profit trade at the maximum or highest point but rather give back a significant part of the profits. The reason is that trend following systems of course need opposite rates to generate the confirmation that the current trend is coming to an end.
• Long sidewards phases with variations
  The above-average grades are not distributed evenly. Annual profits or losses are sometimes subject to strong variations so that over a year or a few years sometimes only low profits can be achieved. Within this period there are short but extremely profitable phases that generate the complete return.