MANAGED FUTURES

What investment strategy does Commtrendz follow?

Our mission is to consistently provide our clients with superior returns on investment, on a risk-adjusted basis. Preservation of capital forms the foundation of all our investment strategies.

We use a proprietary technical trading strategy to capture short and intermediate trends in the market. Our models are skilled at locating trading opportunities that have favorable reward to risk characteristics. In practice, this systematic process dictates that we close many positions with a small loss in order to provide downside protection, but it also ensures the discipline to stay in profitable positions in order to achieve possible long-term gain for our investors. In either case, our investments reflect our trading models' assessment of the market itself, not a trader's emotional response.

We believe that an investment strategy can only be as successful as the discipline of the manager to adhere to its requirements in the face of market adversity. Our methodology offers investors a rational approach to markets, unaffected by judgmental bias.

Risk management is a key component of our approach. We trade only the most liquid markets (i.e. Gold, Silver, Crude), and generally do not carry positions overnight (as the Indian commodity futures markets do not yet operate on a 24 x 7 basis). However, we do occasionally carry overnight positions when the situation warrants, but our overnight position limits are pegged at a much lower level than daylight position limits. We limit risk on any particular trade to a low percentage of equity available. We adhere to strict stop loss levels, and also adjust our stop loss levels as a trade progresses in order to lock in profits. The Net Asset Value (NAV) of the investment is computed on a daily basis, and if the loss at any time exceeds 25%, Commtrendz will automatically lose the mandate to manage the investment.

What has been Commtrendz's track record in commodity futures?

Our clients have benefited immensely from our trading advisory services wherein we provide positional and intra-day trading strategies. Commtrendz has had a success rate of over 60% on all its trading calls given during the period May 2004 – July 2006. Our clients will be able to attest to our superior performance. On the managed futures accounts that we handle currently, we have been providing average monthly returns in the range 4.0 –4.5%.

How does the Managed Futures scheme work?

The process flow is as follows:

Ø Investor establishes commodity futures trading account with Broker

Ø Investor deposits corpus with Broker, which will be utilized against margin requirements for transactions.

Ø Investor executes Power of Attorney authorizing Commtrendz to trade on his behalf and on his account through the Broker

Ø Commtrendz instructs Broker to execute trades on Investor's account

Ø Broker uses Investor's deposit for margin requirements.

Ø Reconciliation of accounts takes place every quarter

How can I track the performance of my managed account?

You will receive contract notes/ledger statements etc. directly from your broker. Commtrendz will provide monthly performance reports to enable you to monitor the performance of your account.

What are the tax implications of trading in commodity futures in India?

We understand that gains/losses arising out of trading in commodity futures are considered “speculative” and can be set off only against other speculative losses/gains, and that tax rate applicable is the investor's marginal tax rate based on normal income tax slabs. Investors are encouraged to seek professional advice from their tax consultants before participating in the scheme.

Should you require any further information or clarification, please send a mail to info@commtrendz.com or call Mr. Mani on 022-26823028.

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