CCTRACK’S METHODS AND STRATEGIES
We are a global provider of FX asset management solutions using quantitative strategies and an array of unique system-based applications to generate absolute returns in areas including risk parity, alpha models and FX overlay. Our multi-strategy hedge fund targets global financial institutions in North America, Europe and the Asian markets.
FX Overlay is a hedging strategy to partially or fully manage foreign exchange exposure. FX Overlay can be passive with the sole objective of reducing cash flow volatility, or it can be more active with the goal of maximizing yield and or momentum forecasts. Overlay is used by investors and corporate hedgers in a variety of ways. CCTrack provides advisory and execution services for our clients.
ParityTrack is a strategy designed to provide high risk-adjusted returns using extremely liquid and actively-traded products. It is comprised of global equity index futures, global fixed income futures, commodity futures, and foreign exchange. The use of FX as an asset class serves to provide further diversification among asset classes utilized.
CTATrack is a strategy designed to provide high risk-adjusted returns using Foreign Exchange spot, forwards, and non-deliverable forwards as well as non-FX futures contracts. The strategy mixes momentum, mean reversion, and correlation to other markets across varied time periods to generate an uncorrelated portfolio. We use active G30 FX and liquid futures and have varied holding periods from minutes to months.
SkewTrack is a strategy that uses a relative value approach to enter into a long volatility biased options portfolio. It currently uses the OTC foreign exchange market to find opportunities using extremely liquid and actively-traded products. SkewTrack has a low correlation to equities and other global indices, while still providing investors with returns during lower volatility regimes.
Politics and trade wars dominated markets in June. The month began with the view that much of the United States’ trade bravado on trade was just a negotiation tactic. This premise found some support after a successful North Korea Summit in Singapore. Developments subsequently began to unwind quickly as: NAFTA negotiations deteriorated; Trade talks with China turned sour; and Political developments in Italy and Germany renewed populist fears in Europe This geopolitical environment made for ugly headlines even with improving US growth and more central banks beginning to depart from easy money policies. Trade wars played a role in countering Q2 growth, and are making Q3 outlooks more difficult. As a result, many have been hesitant to invest without more information. This act of balancing animal spirits against the risk of delaying to the point of uncontrolled inflation dominates the Q3 outlook. View Investment Letter
The lessons from May are many. We started the month with risk off and ended it with risk on. In between, volatility, driven by uncertainty and fear, proved to be the constant. There was a litany of geopolitical fears to consider: Emerging Market contagion arising from Argentina to Turkey US/North Korea Summit plans being called off, then planned again Fears of a US/China trade war easing before returning US/EU trade talks turning to tariffs US/NAFTA trade talks turning to tariffs US/Iran nuclear deal falling apart Italian government coalition plans being called off then returning, with PM Giuseppe Conte now facing his first vote Spanish government coalition planned then called off while PM Mariano Rajoy was replaced View Investment Letter
April ended with a bang, not a whimper, as risk-on moods dominated markets and geopolitical fears lessened. The historic peace summit between North and South Korea has been part of the storyline. China–US trade war fears decreased amid talks and expectations for resolution. There were fears of chaos in Syria after the US/UK/French joint bombing of Assad’s chemical weapons storage and plant, but the bombing did not lead to a Russian response. One final issue that remains into May is the Iran Nuclear agreement, which Trump seems intent on ending, despite efforts by Macron and other EU leaders to keep it afloat. View Investment Letter