TulipFX introduces Managed Account service.

[Ozzie]

TulipFX MAM Account

TulipFX introduces Managed Account service.


What is a managed account?
A managed account is a perfect solution for investors who do not have time to trade themselves, or lack the experiences or skills to reach their own investment goals. A Managed Account (or MAM) would allow you to piggyback ride on our performance without any effort on your part.
So the advantages of a Managed Account: service, simplicity & expertise..!


How does it work?
The only thing you need is a live trading account with our preferred broker, Pepperstone. The "Standard" account will suffice as we've found it actually tends to perform as well as (and slightly better) than the Razor account (comparing net-net).

Remember: you have full control over the account, deposits, withdrawals etc. We(TulipFX) can only trade on your account.

Once your account with Peperstone is established, just tell us you wish to join our MAM program and we'll inform Pepperstone. They'll send you a form (Limited Power of Attorney which allows TulipFX to trade on your account), and once you've signed and returned the form to them, you are all set. That's all…!

We do not charge a management fee.
We do not charge a maintenance fee.
We do not add margin to spreads.

Our earnings come from a share of profits. For most accounts this is set at 30% of profits, to be calculated each month. Pepperstone takes care of this automatically so there's no work on your part.


Our Investment Objectives
#1 Capital Preservation
#2 Capital Preservation
#3 Returns in excessof average indexes


Performance since inception:



The account was established in July 2011.

Our primary aim is capital preservation while returning a performance in excess of the prevailing bank interest rate, bond rates or average stock market index.

Due to market conditions fund has traded in 2012 significantly less than 2011. Re-organisation of systems has occurred this year. The drawdown risk has been halved for each system to allow space for systems in development to be added to the portfolio without increasing the systematic risk.


MAM -the Advantages:

• Performance based – if you don’t profit,we don’t get paid.
  
• No additional fees – we don’t even chargethe usual “annual administration fees”, we only charge you fees on profits made during each month.
  
• No pooling of funds – clients retain full ownership of their account(s). The funds are held in a dedicated segregated bank account. Pepperstone has fully indemnity insurance by Lloyds of London.
  
• No entry or exit fees – no set up fees or withdrawal fees. Profit realisation flexibility – funds are available for withdrawal at call.
  
• No minimum timeframe – like all investments however we do suggest a period of at least 1 year to as certain true viability.
• Real-time statements – view what trades and overall positions have been taken by their fund. Available 24/7 in realtime.
  

Restrictions:
* The minimum investment is $10,000 USD or equivalent.
* We can accept the following deposits: AUD, USD, GBP, EUR, SGD and JPY
* Any nationality accepted - including US clients


To apply or request more information please email support@tulipfx.com.

[Ozzie]

Summary of questions and answers

Below is a selection of questions and answers. Questions are from potential clients and our answers provide more detail than the introduction above.

If you have any questions not covered please feel free to ask. And we will reply.

The PAMM sounds like an excellent idea - for one thing it would prevent my delusions of manual trading adequacy from messing up my account ! It would also save me $300 per year on a VPS which could go into the PAMM pot.

Yikes - more questions :

Will you be disclosing the portfolio of EAs ?
Will you be publishing EA performances on fxbook ?
Will EAs be retired / substituted if they perform badly ?
Would it be possible to allow people to "opt out" of particular EAs ? Just wondering if there is wiggle-room for granularity / customer control here ?
Will you require an up-front payment, or a management percentage ?

On the basis of what I have seen so far - I would be more than happy to throw you guys some acorns, if you can grow it into a tree, in exchange for some more acorns. (and at that point, the analogy snapped...)

Nice attempt for analogy....but you don't have to throw us anything. You plant your own acorn tree, and we'll try to nourish it so it will produce above average amounts of acorns...and as a thanks you'll pay us some of those acorns you've earned.

Answers:
1. Nope. That's the baker's recipe.
2. Yes. The MAM results will be publicly published.
3. Yes. We monitor performance and EAs like a hawk, and have several other EA candidates on demo/backtest/lab
4. Nope. The MAM software does not accommodate for that.
5. We'd take a percentage of gains on monthly basis only. No management fees, startup charges, etc.

I really like your version of the analogy - by my reckoning that makes you the nicest supplier of fertiliser ever ! This sounds like it could be a serious win-win situation - if it does well, just a link to the performance in FPA or babypips should find you quite a few customers.

I can totally understand the "bakers recipe" thing. I just wonder if you would attract more community interest if people knew that a, b, or c "name" EA was a part of the overall mix - e.g. I heard of this great EA over on birts site - is it in the MAM ?

A wise man once said to me "if you can remove all objections to a purchase, you have made a sale" - you're pretty close to removing all objections.

The only other things I can think of are :

Will I get clobbered for tax on interest ?
Do I have enough money to enter ?
Can I deposit / withdraw as I go ?

The EAs won't be on Birt's site. All EAs are private EAs, these are not available to the public (except Kanga - obviously).


As for tax, I don't know what the UK laws are. However you can apply using whatever entity you wish. Could be an individual, company, trust, offshore account - whatever you'd like. It doesn't matter to us, as long as you have the legal right to sign the limited power of attorney allowing us to trade your account. After that, any profits are 'income' which would be treated the same way any other derived income is in the UK. Your accountant would know more.


We haven't decided what the minimum amount for the PAMM will be. Dutch and I will be discussing this. We will say though that 10% DD will be the maximum historical drawdown over the whole portfolio (not per EA). It won't be one of those 300% for 3 months then it all comes crashing down situations. We're serious traders and our PAMM/MAM is traded seriously.


Yes. You will control your account. You can deposit extra money whenever, and withdraw any money whenever. You deal direct with the broker for deposits and withdrawls. We can't touch your money. The broker at the end of the month will transfer the agreed management fee from profits automatically. So your account (apart from trading) is totally outside of our control.

Will the PAMM be available to residents of oppressed countries (like USA)?

At this stage we are only offering MAM through Pepperstone, so that restricts it to non-US entities. I am unsure of the regulatory laws in the USA and we do not want to get on the wrong side of the NFA. Perhaps your accountant could advise you if there is a method for you to create a non USA entity and if it is worth while in your case.

I like the sound of this.
Although a quarterly billing cycle. ie % of gains over three months rather than monthly might match the performance of the account a bit better if a minimum one year investment is the recommendation?

The calculation is done on the 'high water mark'. Best way to describe that is with an example.

January balance = $10,000
February balance = $12,000 ($12,000 high water mark)
March balance = $11,000 (-$1,000 below high water mark)
April balance = $12,000 (equal to high water mark)
May balance = $13,000 (+$1,000 and new high water mark)

Basically it works on accumulated net profit. So if in one month there is a loss of $1,000 - then that $1,000 has to be made up, and your account at an all time high before the profit sharing kicks in. That way there is no double dipping.

In summary: we only get paid if the profits on your account are at an all time high.

I guess this isn't for the small investor with just a couple of thousand dollars.

No, it's not unfortunately.

However, on the flip side, a $10,000 account you would only be 'risking' $1-$2k of the capital. It would take extraordinary circumstances for drawdown to exceed 10 percent and exceptional circumstances to draw down 20%.

We are managing money here - not selling lotto tickets.

Thanks for including the myfxbook link, Ozzie, you show once again your professionalism by being as transparent as possible.

I see that since Dec 1st, 2011 the returns were indeed much smaller than for the rest of 2011 (the average being 0.61% / month)
Was that a direct results of less trades? And is the reorganization of systems expected to bring the returns higher?

Just to be clear: the fact that your portfolio averaged 0.61% / month while many others were losing is still a great thing

We didn't trade for the whole first quarter of 2012 pretty much. On for a day or two here and there - before we decided that things were a bit skittish so stopped again. Add to that December and there was not a lot of trading happening early in the year. Recently though, with the new reduced individual settings things are getting back on track. We have new systems on demo, but its not a quick/rushed road from EA Lab to live trading (as it shouldn't be).

Like (mostly) everything there are good and bad sides. The bad side is that there hasn't been much profit creating in 2012. The good side, as you alluded to was with the cautious approach there hasn't been any loss making. Like I stated in the 1st post, we have 3 aims - and the first two of those are capital conservation. Rather than push the market trying (and possibly failing) to squeeze out profits we are happy to take the conservative approach.

Overtime we'll return to 5%+ returns per month with the reduced risk model. A long term approach is what we believe in and make no apologies that it won't make client's rich by Christmas.

Dutch & Ozzie
Have you ever thought about combine manual trading and EAs together for managed account? I witnessed Dutch's live trading, personally I have no doubt about its profitablilty at all. Same as Ozzie's.

As many of you know - me personally I don't have the emotional fortitude to do manual trading. Trading your own money is one thing, trading significant funds of others is another thing again.

With automated trading we can do historical testing - allowing us to control the risk with great confidence.

So emotion is removed and historical risk can be assessed. That is why we only trade using algorithmic systems.

[Ozzie]

On 10 July 2012 we began with a new portfolio based on a capital preservation strategy:



(Note incorrect monthly return calculation on MyFxBook - we have returned 2% between July 10 and 28 July 2012)

[AlexM]

I like the sound of this.
Although a quarterly billing cycle. ie % of gains over three months rather than monthly might match the performance of the account a bit better if a minimum one year investment is the recommendation?

[Ozzie]

I like the sound of this.
Although a quarterly billing cycle. ie % of gains over three months rather than monthly might match the performance of the account a bit better if a minimum one year investment is the recommendation?

Hi Alex,

The calculation is done on the 'high water mark'. Best way to describe that is with an example.

January balance = $10,000
February balance = $12,000 ($12,000 high water mark)
March balance = $11,000 (-$1,000 below high water mark)
April balance = $12,000 (equal to high water mark)
May balance = $13,000 (+$1,000 and new high water mark)

Basically it works on accumulated net profit. So if in one month there is a loss of $1,000 - then that $1,000 has to be made up, and your account at an all time high before the profit sharing kicks in. That way there is no double dipping.

In summary: we only get paid if the profits on your account are at an all time high.

[AlexM]

That's even better. Confidence inspiring. If the minimum investment is within my reach I'm in.

[Dutch]

AlexM,

We've set the minimum account balance for MAM to 10.000 USD (or equivalent).

Cheers,

Dutch.

[pipvic]

AlexM,

We've set the minimum account balance for MAM to 10.000 USD (or equivalent).

Cheers,

Dutch.

I guess this isn't for the small investor with just a couple of thousand dollars.

[Ozzie]

No, it's not unfortunately.

However, on the flip side, a $10,000 account you would only be 'risking' $1-$2k of the capital. It would take extraordinary circumstances for drawdown to exceed 10 percent and exceptional circumstances to draw down 20%.

We are managing money here - not selling lotto tickets.

[fxloki]

Hi Dutch and Ozzie,
I have a few questions:
- I guess it doesn't matter if the account is in another currency than USD (like SGD)?
- Do you still suggest Pepperstone normal account, or Razor?
- Last, in the MAM setup, the broker is sending one big order for all accounts under management, or each account will send its own orders (meaning potentially some clients will get different results, as we have seen for Kangaroo on same brokers people get different results)?
Thanks!