Diversified Trend Program
Overview
Transtrend has offered its Diversified Trend Program since 1992 following a period of five years of in-depth research. The program is available in two risk profiles, the Standard Risk profile and the Enhanced Risk profile, each in various currencies.
The objective of the Diversified Trend Program is to achieve long-term capital appreciation with controlled risk, primarily through trading on the world's organised markets in futures, options, swaps, spot, and forward contracts. The trading style of the Diversified Trend Program is referred to as “managed futures”, a recognised hedge fund style, which is known for its non-lineair correlation with other hedge fund styles and traditional asset classes.
On the basis of the Diversified Trend Program, a dynamic and diversified portfolio of investments is selected from a broad universe worldwide. These investments may include futures, swaps, and forward contracts on stock indices, single stocks and other equity related markets, bonds, interest rates, currencies, and commodities such as base and precious metals, agricultural, and energy products. The program looks for opportunities in outright markets as well as in combinations of different markets. In most cases the actual investment portfolio consists of more than 100 different positions. The program applies a trend following investment approach and aims to take advantage of price trends, irrespective of the direction of the markets. The advantage of financial instruments such as futures and forwards is that they provide for the possibility to take both long and short positions and hence to potentially benefit from both rising and declining markets. A long position in a specific market will benefit from an uptrend, and a short position will benefit from a downtrend.
To optimally benefit from price trends, the program allows for a leveraged exposure to these markets. Before taking a position in a market, the program evaluates the impact of such a decision on the total risk of the portfolio.
The Diversified Trend Program makes use of in-house developed risk management techniques which aim to prevent that the impact of adverse price movements in the markets exceeds a predetermined risk level for the total portfolio. The investment process is based on quantitative methods and automated routines, which mean that investment decisions are not based on qualitative value judgements by an individual portfolio manager. Under both favourable and unfavourable market circumstances all investment and risk management decisions are consistently guided by the program and are executed without any emotional or subjective involvement. To ensure that the program remains, or even improves, its effectiveness, it is monitored and enhanced on an ongoing basis by Transtrend’s Research & Development team. Transtrend’s approach is extremely consistent and disciplined and its effectiveness has been demonstrated since its implementation in 1992.