Benefit from motion based on statistics reliability

Markets move in trends. Increases alternate with decreases or periods of sideways market action. The Brouwers Fund aims to profit from market movements. It does not matter whether the movement is rising or falling. In sideways markets with no or little movement, we will have difficulty making returns. This is the downside of our approach.

Absolute return based on static reliability

In card games, a good hand gives a greater chance of winning. This is a matter of statistical reliability. We also look for statistical reliability in the market. Based on our research, we know which trends and patterns are reliable. As soon as an interesting pattern is recognised by the computer, a transaction follows automatically. We are not permanently invested and only execute a transaction when there is an opportunity. We do not try to beat a benchmark, but are focused on achieving an absolute return.

Risk management

We apply a risk budget per strategy and per individual transaction. We also look at the correlation between the various strategies. In principle, we only want to risk a fraction of the total fund capital in a transaction. In addition, we want to be absolutely sure that we do not lose much more than the risk budget we set. That is why we mainly trade in 24-hour markets and close almost all positions at the end of the trading week. The risk of a large overnight gap (price jump or price fall) that could result in more loss than desired is limited but not entirely excluded.

Automated and disciplined

In order to realise a good return on investment, the consistent application of decision rules is essential. This requires a disciplined approach. Our approach is therefore largely automated. Another reason to use the power of the computer has to do with taking advantage of opportunities. The computer has a broad scope and scans for opportunities within the selection of markets and instruments we have made.

Small losses + Large profits = Return

Not every transaction can be successful. Based on our research, we know that our hit ratio (ratio profit/loss transactions) usually does not exceed 50%. So we have at least as many loss transactions as profit transactions. On balance, we still achieve a good return by consistently terminating a transaction if it does not show the desired course. This maximum loss is determined and calculated in advance. If a transaction runs as expected, we let the profit grow. The sum of relatively small losses and large profits is our return.

Objective Return

The fund aims to make an absolute return independent of developments on the financial markets. Because we have achieved a good risk/return ratio with a low drawdown in back testing and live results, we are able to scale up transactions (leverage), with the aim of achieving a higher return.

Based on the test results, we expect to realize a net return for the Class A participant of 5% on an annual basis. For class B, an expected net return of more than 10% applies as this will be done with greater leverage.

Warning

Investing involves risks and no approach is flawless. So our approach also has its drawbacks and must be able to withstand tougher times. Should there be a low level of agility in the future (as in 2017), this could have consequences for the realization of the target. If the character of the price development changes over a longer period, this may have consequences for the return development in the fund.

Trust

We have great confidence in our approach based on our research. However, we would like to point out that there may be times in the future where it may be difficult or even impossible for us to make a return. It is therefore important that a participant maintains a realistic expectation and gives himself sufficient time to achieve the objective.
If a participant is able to participate in the fund for a period of 3 to 5 years, the chance of achieving the return target is in our view very realistic but obviously not guaranteed.

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You can request the information package via our website. The information package contains:

  • Brochure
  • Information memorandum

You can request the information package via our website. The information package contains:

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