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.
July brought about a rebound in risk parity strategies. Despite rate hikes by the Bank of Canada and data that continues to suggest the time is past due for Europe to taper its quantitative easing, there has been some moderation of fears about the ECB and other central banks rushing to normalize rates. Bond selling that started in earnest at the end of the second quarter has stalled due to slower growth, while equities have rallied to new record highs—Q2 earnings are part of that story, along with reduced policy fears. The FOMC is widely thought to be shifting to a modest balance sheet run-down in September without a rate hike, with less than a 50% chance for a December hike, linking to inflation data. View Investment Letter
Trading in June left markets confused. Should investors take money off the table and save for colder markets? Or should they celebrate the new highs from stocks set in mid-month while expecting more fun through the summer? The source of this confusion starts with central banks. View Investment Letter
The potential of the markets felt actualized in May. Politics dominated and equities climbed that wall of worry to make new highs with the S&P 500 up 1.4%, UK FTSE 100 up 5%, and Euro Stoxx 50 up 3.3%. There was a shift from US fiscal hopes to European growth that drove risk assets higher. Following Emmanuel Macron’s resounding victory in France, the focus of uncertainty initially shifted from EU politics to the UK and US. — View Investment Letter