Chesapeake Capital

Corporation (Diversified Program)

Fund Investment Objectives

The Chesapeake trading methodology is long-term trend following, utilizing robust trading systems across a broadly diversified set of markets -- put simply, Classic Trend Following. It is a rules-based investment approach that focuses on capital preservation, while attempting to provide positive annual returns. Utilizing diversification and robust systems, the firm's goal is to maximize the profit in each trade by following the system entries and exits, regardless of market conditions or temptations. They believe using robust trend following systems with minimal filters, conditions or other parameters minimizes the risk of curve fitting and positions them well for market conditions that may not have occurred in the past. They invest in over 110 markets worldwide (plus 100 single stock futures), including currencies, commodities, interest rates and equities (which as noted includes both single stock futures and indices). The portfolio strategy is designed to approximately target an equal exposure split (25% each) between the currency, commodities, interest rate and equity markets. As well, the maximum risk is limited at the market level, the sector level and the portfolio level. They believe there is a major distinction between the volatility of investment returns and the risk of losing capital. Chesapeake is consistent, focused and single-minded in their approach and believes their long term trading systems to be the most consistent and reliable at making positive returns frequently.