FTM is a dynamic investment product that places emphasis on capital preservation first and foremost, while targeting returns commensurate with the long term market averages without the roller coaster ride associated with many buy and hold investment strategies.
Launched in March 2010 FTM was created in response to the massive falls experienced by investors during the global financial crisis which clearly illustrated that traditional asset classes such as equities could not be counted on for diversification simply by means of geographical location. Both developed and emerging markets alike experienced large falls as did commodities and non-treasury bonds.
FTM works by splitting the portfolio between non correlated alternative investments. Firstly it has anywhere from 85 - 90% of the portfolio in discounted medical accounts receivables which are secured by an average of $3 worth of receivables against every $1 invested. To reduce the risk even further the receivables are held by a range of insurance companies generally limiting the maximum exposure of any one company to 10% thereby lessening the risk of default or adverse effects on the portfolio.
Then there is a cash component which can fluctuate between 5 and 10% of the portfolio. Together this makes up around 90 - 95% of the portfolio and has absolutely no exposure to market forces. The remainder of the portfolio is invested in a propriety algorithmic currency trading system.
To understand the concept of these receivables consider the following example. There is a car accident, and as a result one of the drivers will require back surgery. The receivables company will fund the operation now and collect from the insurance company at a specified time later. The receivables company holds a lien on the insurance proceeds in the interim.
This is similar, in principle, to accounts receivables factoring, but with a critical difference. In traditional factoring a company buys a large pool of debt and simply hopes that enough will be paid to ensure a profit. In our case, the Medical Accounts Receivables Company pick and choose the cases they wish to fund and, on average, 4 out of every 5 cases reviewed are rejected, as investor safety is paramount. It should also be noted that the payer is an insurance company, not a patient or hospital.
The underlying investment strategy utilized by FTM has been in use since 1997 and due the stringent underwriting criteria the worst outcome to date was the return of the money used to fund the receivables. Since FTM's launch in March 2010 we have notched up 33 positive months and an average annualized return of 9.59%. FTM has won the award as best fixed income fund offshore at the world finance hedge fund awards for 2011 and 2012 and was also awarded a similar award from global banking and finance review.
The major difference between FTM and traditional investments is the use of Medical Accounts Receivables which make up 85% - 90% of the portfolio and are secured at a rate of $3 for every $1 invested. The remainder of the portfolio can vary from 5% to 10% in cash and have up to 5% of the overall portfolio in FX trading, set with a maximum stop loss of 35 percent which limits the overall portfolios exposure to 1.75% .
90% - 95% of the portfolio is Capital Secured
5% (maximum) is exposed to FX with a total portfolio risk of 1.75%
Targeting returns commensurate with the long term market averages irrespective of market conditions or direction