eWeb-Forex can refer clients to respected independent money managers and hedge funds to manage their funds. Although these professionals tend to have superior and more consistent results than self-traders, any investment related to foreign exchange should be considered high risk and speculative. The minimum investment with professional money mangers and hedge funds vary from $50,000 to $500,000. In many cases, clients referred by eWeb-Forex are able to open accounts with amounts significantly smaller than the official minimums.
Investors who are interested in having their funds managed by professionals should contact sales@eweb-forex.com. Please specify investment size and its place in your overall portfolio. These items help eWeb-Forex determine which managers/hedge funds are most appropriate.
The advantages of a managed currency account as a component of an investor's overall investment portfolio are listed below:
- Ability to Profit in Rising or Declining Markets. The performance of a currency portfolio has historically been non-correlated with that of traditional equity and fixed income investments. Unlike equity and fixed income managers, a currency hedge fund manager employs both long and short positions in its currency portfolio to profit under any market conditions.
- Global Diversification. The performance of equity and fixed income investments in one country is often highly correlated to the performance of equity and fixed income investments in other countries. As a result, global portfolios composed solely of equity and fixed income investments lack full diversification, even if they are geographically dispersed. Investing in currencies gives investors access to markets beyond equity and fixed income investments, providing more complete diversification and a reduction in portfolio risk.
- Reduce Portfolio Risk While Enhancing Returns. When combined with an investor's existing portfolio of equity and fixed income instruments, investment in the appropriate currency fund reduces the volatility and risk of that portfolio while enhancing long-term returns.
- Risk Control. Investing in currencies incorporates disciplined risk control procedures in order to limit risk and achieve the smoothest possible growth in its investors' account value. Leverage is never used in any individual currency position and stop-loss orders are always in place. Investors in currencies are therefore able to achieve a high rate of return with a level of risk control that is not possible with traditional "buy and hold" investments.
Advantages Of Managed Funds
Although returns are far from guaranteed, professional hedge fund managers tend to outperform individual speculators because they follow disciplined money management techniques and systematic trading approaches. Professional hedge funds also tend to use their leverage more judiciously, avoiding sudden catastrophic losses. eWeb-Forex makes an effort to refer prospective foreign exchange investors to hedge funds that either have a solid trading history with eWeb-Forex (measured by both trading performance and risk used to achieve that said record), or an industry recognized name with an audited track record. We do not refer investors to individual discretionary traders.
Note of Caution
Some hedge funds may require a minimum lock up period for funds invested of up to three months, and the more established players may even require longer loc up periods. Large publicized losses at some of the world's biggest hedge funds are sometimes just the tip of the iceberg. Many hedge funds, which trade risky OTC instruments, suffer significant losses from time to time and any investment in these funds should be regarded as extremely speculative in nature. In selecting the right hedge fund, eWeb-Forex urges common sense. Just because currencies may seem exotic or less familiar than traditional markets (i.e. equities, futures, etc.), it does not mean that the rules of finance and simple logic are suspended. For Instance any promises of fantastic and consistent monthly gains of 15% or more are wildly exaggerated and would never be claimed by legitimate investment managers. Although some traders manage accounts to produce amazing short-term gains, the risk taken to produce these gains is enormous and will probably result in losses equal or greater than the gains.
