Unlock the Future of Financial Success

Revolutionizing Algorithmic Trading with Protocol 37

Experience the pinnacle of automated CFD hedging with our cutting-edge technology.

Protocol 37 stands at the forefront of financial innovation, offering a fully automated algorithmic CFD hedging model designed to maximize efficiency and profitability. Developed by Truestone Capital, our state-of-the-art technology leverages advanced algorithms to provide unparalleled accuracy and speed in trading, ensuring optimal performance in the financial markets. With Protocol 37, you gain access to a robust and reliable system that adapts to market changes in real-time, giving you a competitive edge.

Truestone Capital is a Mauritian-based provider of investment management services within  tax-efficient structures. As the arhitects of Protocol 37, their intention is to enrich the lives and businesses for underlying clients from a tax mitigation and investment perspective. Truestone have a wealth of experience in all aspects of investment management, and have also aligned themselves to the very ‘best-of-breed’ providers globally to ensure a truly holistic value-added service which extends to both corporate, family and private clients.

STRUCTURED FINANCIAL PRODUCTS

Protocol 37 AMC

The Protocol 37 Actively Managed Certificate (AMC) is a structured financial product that provides investors with access to a portfolio actively managed by Truestone Capital. Our AMC is issued by Eurydice PCC Ltd to give investors exposure to the P37 bespoke trading system, by pairing closely correlated CFD instruments into multiple tier-level baskets. Instruments are chosen that show varying levels of mean reversion, referring to their tendency to return to an average value over time. This approach considers the divergence between instruments and uses the coefficient of variance to determine trading intervals. The coefficient helps standardize mean reversion into a dynamic average between instruments, even when their relationship is only non-linear dependent. Moreover, adapting to changing market conditions, a model is applied that switches between different volatility states to decide when to open trades.

Unmatched Performance Metrics

Protocol 37 has revolutionized financial asset management with its cutting-edge algorithmic trading model.

Max Gross Profit %

Return Rate

Win Rate %

Maximum Drawdown %

Gross Exposure

Max Net Profit %

Historical Results*

We have back-tested the P37 model on 16 years of historical data at 1-minute intervals. The results reflected are derived from an unchanged aggressive portfolio since 2008, with a maximum of 12 baskets (indices only), a retail leverage of 20 (1:5), and an equity cap of 75%.

*IMPORTANT: The back-testing results presented are provided for informational purposes only and are not guaranteed to be accurate or reliable. The back-testing results are based on historical data, which may be incomplete or inaccurate, and the performance depicted may not reflect actual trading performance. The data used in this back-test has been obtained from sources believed to be reliable, but its accuracy and completeness cannot be guaranteed.

The software and algorithms used to generate these results are subject to potential errors, bugs, or inaccuracies that could impact the outcome of the back-test. By using this information, you acknowledge that the back-test results are hypothetical and do not represent actual trading. You agree to indemnify and hold harmless Truestone Capital from any liability, loss, or damage resulting from your reliance on the back-testing results, including any errors in data, software, or calculations.

 

Transform Your Financial Future

Before you invest, it’s important to understand what kind of investor you are, which means, knowing your willingness and ability to accept risk, your investment time horizon and your objectives. Try the Investor Questionnaire to begin to learn some insights into factors such as your investment time frame and your comfort level with investment risk. While this questionnaire can serve as a useful starting point for discussions with your financial advisor, it’s important to understand that this is a not a substitute for a thorough risk assessment with a financial advisor.

Terms of Use: This questionnaire is provided for informational and educational purposes only. It does not constitute financial or investment advice, nor should it be relied upon as such. When it comes to investing, we strongly recommend consulting with a registered investment advisor for personalized guidance.

Frequently Asked Questions

What are CFDs?

CFDs are a type of leveraged financial derivative products that allows you to speculate on the price movements of an underlying asset without actually owning the asset itself.

Are CFDs volatile?

Yes. CFDs markets can experience sudden price swings due to market drift or divergence, making it difficult to predict short-term movements and potentially leading to significant price swings.

What are Margin Calls?

When trading leveraged (margin-based) products, if the value of the client’s CFD position falls and their account equity falls below a certain maintenance level (margin requirement), IG Markets might issue a margin call. This will require the client to deposit additional funds to maintain their position or face forced closure (stop-out).

Can I withdraw funds anytime?

Yes. However, it may take a few months for your funds to be at a net positive level. We recommend that you do not withdraw any funds in the first 6 months. If you do choose to withdraw all your funds prematurely, the closing of your open trades might result in losing a portion of your equity.

What is an AMC?

An Actively Managed Certificate (AMC) is a financial product that allows investors to invest in a dynamic portfolio managed by a professional asset manager. Unlike passive investments, AMCs are actively managed to take advantage of market opportunities, aiming to maximize returns while managing risk.

What investment strategy is used in this AMC?

The AMC follows the ‘Protocol 37’ strategy, an algorithmic trading strategy that pairs correlated CFD (Contract for Difference) instruments into structured baskets. It leverages mean reversion principles and dynamically adjusts trades in response to market volatility, aiming to minimize risk while capturing short-term price deviations.

How is the performance of the AMC measured?

The performance of the P37 AMC is measured based on the net asset value (NAV) per certificate. The NAV is calculated dynamically and reflects the value of the underlying portfolio managed within the AMC. Investors can track the NAV to see how the investment is performing over time.

What kind of investor is an AMC suited for?

The P37 AMCs is suited for investors who are looking for active management of their portfolio and are comfortable with higher-risk, higher-reward strategies. The P37 AMC is ideal for sophisticated investors who seek exposure to the underlying advanced trading strategy of mean reversion, and understand the risks associated with this approach.

How is the portfolio in this AMC constructed?

The portfolio is constructed based on Protocol 37, which selects pairs of correlated CFD instruments to create a balanced portfolio. One instrument is held long, while the other is held short, creating a market-neutral position that benefits from mean reversion. The portfolio is dynamically adjusted to respond to market conditions.

How do I get started with investing in an AMC?

To invest in the P37 AMC, you need to open an account with any listed platform that offers the certificate. Once your account is set up and funded, you can purchase units of the AMC as you would with other financial products. 

Why use a CFD strategy?

CFDs enable us to apply an algorithmic hedging strategy which can deliver profitable results irrespective of market conditions. The algorithmic software has been researched academically and back-tested on historical data of 16 years, including an out-of-sample data range of 2 years.

What does Drawdown mean?

Drawdown refers to a peak-to-trough decline in the value of an investment or trading account over a specific period. It measures the maximum drop from a previous high point.

Is there counterparty risk?

In theory, there’s a risk that IG Markets, as the CFD provider, might default on its obligations, potentially leading to financial loss for the client. However, this is extremely unlikely as IG is considered low risk, with an overall Trust Score of 99 out of 99. IG is publicly traded, operates a regulated bank, and is authorized worldwide by tier-1 regulators. Client funds can only be withdrawn back into the bank account or credit card from where funds have been deposited.

How does an AMC differ from mutual funds?

While mutual funds and ETFs typically follow specific indices or investment strategies, AMCs offer more flexibility by allowing the manager to adjust the strategy in real-time. AMCs are also more customizable, often designed around specific trading strategies or market views, which can be more targeted than broad index-based funds.

What are the risks involved in investing in an AMC?

Like any investment, AMCs carry risks, including market volatility, liquidity risks, and the potential underperformance of the strategy. Since AMCs can use complex strategies such as leverage or derivatives (like CFDs), there is a higher degree of market exposure, which can result in losses. However, risk management techniques like the dynamic pairing of assets in Protocol 37 help mitigate these risks.

What fees are associated with investing in the AMC?

The P37 AMC includes an annual management fee of 2%, which cover the costs of managing the portfolio, and a annual 20% performance fee (payable quarterly), which is a percentage of returns above a quarterly high water-mark. 

How do I track the performance of the AMC?

Investors can track the performance of the AMC by logging into the website.

What is the minimum investment required for this AMC?

The minimum investment amount is $10,000. 

What is leveraged trading?

Leveraged trading enables one to control a larger position with a smaller initial deposit (margin). This can amplify gains if the market moves in the client’s favor, but it can also amplify losses significantly if the market moves against the client.

How do we counter volatility?

The software applies various risk-mitigation components which are all in play to counter drift or divergence. This includes a traditional stop-loss for trades breaking through the acceptable price collar.  A built-in trade-band limiter will prohibit trades from opening beyond an acceptable grid interval. There is also an equity cap controller to prohibit new trades if drawdown is maximized.

Can my account be wiped out?

No. The software’s risk-mitigation components will protect a stipulated portion of the capital relative to the exposure from open trades and potential volatility. Our testing and live account results indicate that at no point has more than 30% of your equity ever been at risk.

How are the fees calculated?

No asset management fees will be levied by Truestone. On the low-risk option, the client would retain the initial 12%, whereafter any additional profits would be payable to Truestone. On the balanced option, the 1st 8% of growth is retained by the client, whereafter a 30% (to client) / 70% split will be initiated. On the aggressive option, there is no initial growth retention to the client. A tiered split would apply based on the amount invested.

How liquid is an AMC investment?

Liquidity depends on the margin parameters of the P37 AMC. The P37 AMCs is structured to allow daily liquidity, meaning investors can buy or sell units of the AMC on any business day. 

Is my capital guaranteed?

No, we do not guarantee your capital. The value of the P37 AMC fluctuates with the performance of the underlying assets, and you could lose part of your investment. However, the risk management strategies of Protocol 37 are designed to manage and reduce risk.

Can I withdraw my investment at any time?

Yes, the P37 AMC allows for immidiate redemptions, meaning investors can withdraw their investment by selling their certificates, subject to the liquidity terms. 

What tax considerations are there when investing in the P37 AMC?

Tax treatment of will depends on the investor’s jurisdiction. Investors may be liable for capital gains taxes, income taxes, or other types of taxes on distributions. It’s advisable to consult with a tax professional to understand the specific tax implications of investing in the P37 AMC.

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