Axxiom Forex Advisors
|Scooped by Mark Shawzin|
Hedge Funds vs Forex Managed Accounts
As the major stock indexes have dropped almost 7% in 2014, it behooves investors to consider diversified investment strategies, to include asset classes that are non-correlated to their core portfolio holdings.
One of the most popular alternative asset vehicles is a managed forex account. Forex is the acronym for "foreign exchange" or currency market. As the forex market is the largest ($4 trillion per day), and most liquid market, and trades 24h per day, it gives money managers unparalleled ability to control risk more effectively than any other market or asset class.
With the rise in popularity of the forex managed account many questions arise as to how this structure compares or is different from that of a hedge fund.
Here are some of the primary features and benefits of a managed FX account vs. a Fund structure:
FX Managed accounts are more transparent than their fund counterparts. Under a FX managed structure, the investor has direct access to his account. This is provided by the brokerage firm the investor opens the account with, which allows the investor to monitor the positions and transactions in his account, or the profit and loss from each transaction.
The hedge fund, on the other hand, performs its own internal accounting via an external company called a fund "administrator." The administrator provides investors their account statements either on a monthly or quarterly basis, depending on how frequently the fund's net profit or loss is calculated and the fees assessed.
Forex managed accounts investors have daily liquidity. This means an account holder can withdraw some, or all, of his money at any time, without incurring any additional fees. This is in stark contrast to an investment in a Fund structure, whereby, investors are subject to a long-term "lock-up" and may be denied access to withdrawals by the Fund manager during periods of illiquidity in the marketplace.
Forex broker firms offer a freeze feature that stops trading on an individual account at a predetermined equity or risk level. The liquidation level can be set at whatever the client’s requirements. Consequently, client's can take comfort in knowing that their specified maximum drawdown level is underpinned and protected at all times.
Safety of Funds
Forex managed account investors open a segregated account in their own name (individual, joint, corporate, trust) at a designated forex broker firm. Client funds are held at the safest ranked banks in the world. Once an account is opened, and funded, client's have 24/7 transparency and monitoring of their trade activity and account balances in real-time.
The FX managed account structure stands in stark contrast to a Fund structure, whereby clients funds are deposited into a pool controlled by a private entity, have no day-to-day transparency or monitoring capabilities, and are subject to a lengthy "lock-up" periods, or may be denied access to withdrawals by the Fund manager during periods of illiquidity in the marketplace.
No Management Fees
A typical hedge fund will charge an annual management fee of 2%. Axxiom Forex Advisors does not assess a management fee for any of its managed account trading programs and strategies. Pursuant to the Limited Power-of-Attorney (LPOA) agrrement, AFA is compensated based on the profitability (incentive fee) of its clients.
FX Manager Has NO Access to Client Funds
In a managed account program, investors open their own accounts with a designated regulated brokerage firm, not Axxiom Forex Advisors, or its featured strategy providers or money managers. At no time does AFA, or an affiliated manager, have access to client funds. AFA only has limited authority (LPOA) to make trading decisions (buy/sell) in customers' accounts. Clients can revoke the LPOA at any time. This managed account structure - 24/7 transparency and monitoring capability, daily liquidity, regulated brokers, LPOA trading authority - provides a far superior level of safety of funds for customers relative to hedge funds, which typically receive customer funds directly. Some hedge funds have led to investor losses due to fraud, like the multi-billion dollar Ponzi scheme orchestrated by the ex-Chairman of the NASDAQ (National Association of Securities Dealers Automated Quotations system), Bernie Madoff, in late 2008.
At Axxiom Forex Advisors, clients have access to the world’s best traders under one roof, the potential to earn 5% - 10% or more per month, 24/7 account monitoring and transparency, no lock-up period, all while knowing your specified maximum drawdown level is underpinned and protected. We believe there is no better investment structure in the world.
About Axxiom Forex Advisors. AFA is a portal to connect investors with great alternative asset money managers and traders with a proven history of performance. All our Fund managers track records are third-party verified or audited.
For further information about AFA and its services, please consult our website: www.axxiomtrading.com
Contact us: firstname.lastname@example.org