Discussion in 'ETFs' started by VolAlgo1, May 21, 2018.
Whoever doesn't need the other more is the one to decide ..... how much.
The OP is a new nick of stealth vendor who tried to push a xiv/vxx strategy. He claimed it earned 40%/year but looking at the fundseeder (or whatever website) he was playing games with his denominator.
His 25% assuming its a surefire result. Would borrow as much as possible to provide him with trading funds
Following Bernie Maddof, this return is twice as high as Maddof!
I’d have to say most ET members are DIY, So wrong crowd to ask.
Actually, I am not a "stealth vendor", whatever that is!!!My xiv/vxx/svxy strategy previous trades are all here:https://stocktwits.com/VolAlgo1
Sure, I agree that 25% is a high return.But, BlueCrest and Renaissance Technologies have funds that generate returns at that level.Mainly, because they manage their own funds, and don't have to worry about dealing with clients.
Not saying that 25% would be guaranteed.Nobody can give guarantees about trading PL.However, if the trader had produced >25% in his two previous years, and then was already >25% for 2018 so far, would he be worth considering?I know that risk/drawdowns come into the equation as well.If max drawdown was -20%, is it still a good choice?
You are now asking two questions.
What would you pay a trader/manager to net, before paying the trader/manager, based on an expectation of a 25% profit?
Would you hire/allocated toward you with that expectation and the only other information being a max DD of 20%?
I responded to #1.
#2 requires a lot more information about you and your strategy etc. I have been involved with backing traders and allocating toward hedge funds/CTAs and raising money for both. This is not a simple question that can be answered this way. It starts with a bio, breakdown of monthly returns from your strategy (real trading and verifiable), description of your strategy, how you manage risk and trade allocation. With this basic information presented in a professional manner, an investor or allocator can decide if they want to follow up with a conversation. That conversation might or might or might not turn into a request for more details such a daily P/L, who is your back up, what service providers will you use etc.
It is a process. I talk to and email with a lot of traders that make money and want to move into managing money for others. 90% do not take the time to put together a proper package to sell themselves and never move into that space.
The standard 2 and 20% that hedge funds charge
That is a difficult sell for a SMA, for an unregistered trader without the overhead of an admin, auditor or support staff. In many circumstances 0/30 pays the same but is easier to get, IMO.
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