Our 5 Strategies Performance
Check out the performance for all 5 of our investment strategies here. These charts and statistics are straight from the Collective2 (C2) platform, where all our trades are entered in real time and tracked by C2. All performance results shown are hypothetical and are after all brokerage and our subscription fees have been deducted. Please note like all good trading strategies, some volatility and drawdowns are to be expected and this is a normal part of extracting a long-term premium out of the market. Understanding the strategy and committing to it with patience is required to succeed as there is no strategy that magically produces risk-free returns every month.
All of our portfolio's objectives are to outperform the S&P 500 Index on a yearly basis and significantly more in the long term with similar levels of volatility and low-moderate levels of correlation. We have strong convictions in the principals behind our investment strategies and take a long-term view on their returns relative to the market and we try not to get caught up in the month-to-month short term volatility inherent in active investing. We believe in the famous investing axiom "you pay for long term outperformance with short term underperformance".
The All Weather Fund is our unique take on the investing strategy that includes many different types of assets to achieve returns regardless of the prevailing economic environment. This strategy always carries a diversified portfolio of 10 ETFs held long and re-balanced on the 1st trading day of every month. ETFs are chosen based on our unique ranking and portfolio construction algorithms that seek to exploit the strongest market anomaly, momentum in asset prices. This is a robust strategy that requires very little maintenance to run.
Equity Long Short is based on one of the most popular used strategies by hedge funds with a portfolio of both long and short stock positions. Using our unique quantitative and qualitative investment process we identify undervalued high-quality stocks at the start of a possible uptrend to invest long and for shorts we find overvalued questionable quality stocks at the start of a possible downtrend to sell short. This strategy focuses on mid cap and large cap stocks always with a diversified portfolio. The portfolio always carries 10 stocks long and 10 stocks short with total gross leverage equal to 150% of the account value. This strategy will deliver unique returns with low correlation to the market with the ability to perform well in bear and sideways markets.
ETF Pairs Trading is another classic hedge fund trading strategy. The idea is to find 2 similar assets and measure the relationship between them. When one asset is technically weak and the same time the other is technically strong, you buy the weak one and short the strong one exiting both at the same time, hence the term pairs trade. Our unique pairs trading strategy is focused on ETFs which removes the tail risk inherent in single stock names. These trades last on average from 1-3 weeks and for this strategy we use 200% leverage (2:1 account size). Like all our strategies, all trades are done in the last hour of the market day when ample liquidity and tight spreads are available for good fills. This strategy can deliver unique returns unlike the market.
MicroCap Deep Value is our strategy that scrubs the bottom of the stock market to find bargains that Wall Street can't invest in yet. One the best ways for small retail traders like us to generate high returns is to front run institutional money, that is the 100s of billions of dollars in passive index funds and active management that have strict mandates on the size of companies they can invest in. For many, this means companies above $300 million dollars in market capitalization. For this strategy, we only invest in companies with less than $300 million dollars in market cap.
We find high quality businesses that are significantly undervalued and hold them until they reach our own calculated fair value for the stock, usually within several months to several years later. A diversified portfolio across many industries is always held. This strategy uses no leverage and will have a modest correlation to the stock market, however for the patient and committed investor that can stomach short term volatility, a long-term premium for investing in small stocks can be expected.
SmallCap Growth Trend is our strategy that invests in high growth small companies with a market capitalization between $300 million dollars and $5 billion dollars. These are companies with strong growing revenue and business momentum. They are in exciting industries and have room to grow with a large addressable market. The trend part of the strategy looks for companies with not only strong fundamental growth, but all strong technical stock price growth too. The algorithm looks for incoming institutional investment with big volumes driving the stock price higher. It typically invests in companies trading for less than $20 per share.
The goal of this portfolio is seeking out 10x investments, those stocks that have the potential to deliver 1,000% or more returns in less than 2 years. Our trend following algorithm will hold each position until the trend reverses, giving the stock as much chance as possible to develop into a nice big multi-month uptrend and as always with all our strategies this portfolio is well diversified across many sectors and industries.