View
216
Download
0
Tags:
Embed Size (px)
Citation preview
Financial Commodity Investments (FCI)
“Absolute Returns in an Uncommon Market”
462 Herndon ParkwaySuite 205
Herndon, VA 20170703 435-2777
Fax: 703 787-0111www.financialcii.com
This Presentation is not an offer to sell or buy an interest in any investment product or fund.
THIS INVESTOR PRESENTATION DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY INTEREST IN ANY INVESTMENT PRODUCT OR FUND. SUCH OFFER OR SOLICITATION MAY ONLY BE MADE BY MEANS OF DELIVERY OF A DISCLOSURE DOCUMENT WHICH CONTAINS A DESCRIPTION OF THE MATERIAL TERMS (INCLUDING RISK FACTORS, FEES AND CHARGES, AND TAX IMPLICATIONS) RELATING TO SUCH INVESTMENT PRODUCT OR FUND.
• Transactions in options carry a high degree of risk. Purchasers and sellers of options should
familiarize themselves with the type of option (i.e., put or call) which they contemplate trading and
the associated risks. You should calculate the extent to which the value of options must increase for
your position to become profitable, taking into account the premium and all transaction costs.
• The purchaser of options may offset or exercise the options or allow the options to expire. The
exercise of an option results either in cash settlement or in the purchase acquiring or delivering the
underlying interest. If the option is on a future, the purchaser will acquire a future position with
associated liabilities for margin. If the purchased options expire worthless, you will suffer a total loss
of your investment which will consist of the option premium plus transactions cost. If you are
contemplating purchasing deep-out-of-the-money options, you should be aware that the chance of
options becoming profitable ordinarily is remote.
• Selling ("writing" or "granting") an option generally entails considerably greater risk than purchasing options. Although
the premium received by the seller is fixed, the seller may sustain a loss well in excess of that amount. The seller will
be liable for additional margin to maintain the position if the market moves unfavorably. The seller will also be exposed
to the risk of the purchaser exercising the option and the seller will be obligated to either settle the option in cash or to
acquire or deliver the underlying interest. If the option is on a future, the seller will acquire a position in a future with
associated liabilities for margin (see the section on futures above). If the option is "covered" by the seller holding a
corresponding position in the underlying interest or a future or another option, the risk may be reduced. If the option is
not covered, the risk of loss can be unlimited.
• Certain exchanges in some jurisdictions permit deferred payment of the option premium, exposing the purchaser to
liability for margin payments not exceeding the amount of premium. The purchaser is still subject to the risk of losing
the premium and transaction costs. When the option is exercised or expires, the purchaser is responsible for any unpaid
premium outstanding at that time.
What is Absolute Return Investing?
Making money in all market environments.
Making money regardless of market direction.
Making money while managing risk.
Opportunity to have positive returns as the equity markets or underlying commodity markets have negative returns.
FCI Specific Goals
Generate at least a 20% Return on Investment (ROI) to all investors.
Consistent performance in all market environments.
Diversify investments so as to reduce risk.
Execute investment strategies with the best risk/reward profile for all investors.
Generate superior risk-adjusted returns.
So How are we Different?
So how are we different
We use options on commodities exclusively.
We use Option software to actively seek out, document, and validate, option volatility strategies.
We are option Sellers. We let the time decay in options work in our favor.
Our sweet spot is to selling options 4-8 weeks out to get the maximum option premium decay in the shortest period of time.
Option time decay
So how are we different
Multi market approach to option selling
Markets traded: Precious metals, grains, softs, energies, stock indices, other commodities.
Target:95%+ winning trades; 150%+ annualized yield (gain/capital used)
Use of seasonality in commodities
Option strategies used
Selling Naked Calls and Puts
Calendar Spreads
Bull and Bear Vertical Credit Spreads
Diagonal Credit Spreads
Ratio Credit Spreads
Margin percentage used
Generally, 15% to 20% of margin available is used
When special opportunities present themselves or certain positions deteriorate, margins usage can top 40%.
Intra-month statistics
FCI does not keep daily statistics, only monthly statistic.
We execute strategies designed to reduce daily volatility:
FCI maintains positions in many different markets (usually 6 to 9) which restrains day-to-day volatility through diversification.
FCI does not buy or sell futures; rather it specifically trades out-of-the-money options whose prices are less volatile than futures positions as long as the options stay out-of-the-money.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
2004 5.9% -1.00% 9.80% 2.00% 5.70% 1.80% 26.34%
2005 -0.60% 2.90% 0.60% -8.30% -1.60% -2.00% -5.30% 14% 20.30% 4.50% 6.60% 5.00% 38.22%
2006 4.40% 3.10% 4.20% 3.20% 9.40% 3.70% 0.50% 14% -1.81% -1.66% 1.72% 7.28% 58.48%
2007 1.3% 0.39% -0.18% 1.51%
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE.
FCI Monthly Returns
FCI returns vs Benchmarks
0%
20%
40%
60%
80%
100%
120%
140%
160%
FCI
S&P
FCI 12-month trailing returns
0
1
2
3
4
5
6
7
8+-
FCI distribution of monthly returns
PERFORMANCE ANALYSIS
Start Date: July 2004
Total Return Since Inception: 181.0%
Compounded Average Annual ROR 45.61%
Average Monthly ROR 3.33%
Winning Months: 24
Losing Months: 9
TIME WINDOWS
Length (Mths) Best Worst Average
1 20.30% -8.30% 3.33%
3 43.31% -11.57% 10.75%
6 67.47% -13.31% 22.60%
12 111.69% 2.80% 54.06%
24 150.59% 107.92% 122.20%
DRAW DOWN REPORT
DepthLength
Mths.Recovery
Mths. Start End
16.26% 4 2 Mar-05 Jul-05
3.44% 2 2 Aug-06 Oct-06
1.00% 1 1 Jul-04 Aug-04
0.60% 1 1 Dec-04 Jan-05
0.18% 1 * Mar-07 -
Profiles of professionalsCraig B. Kendall, is the owner and manager of Kendall & Company, Financial Investment, Inc. and Financial Investment, LP. Mr. Kendall, is a CPA licensed in the state of Virginia. Mr. Kendall operates, Kendall & Company, a local CPA firm, tailoring its services to entrepreneurial business needing comprehensive CPA and Chief Financial Officer, "CFO Services for Hire".
In 1997, Mr. Kendall, founded Financial Investments, Inc. an investment firm participating in the acquisition of equities, private placement memorandums (PMM), and has participated in other investments securities. In 2001, Financial Investments, Inc. developed and is the general manager of Financial Investment, LP (FILP), a limited partnership developed to capitalize on the opportunities available using alternative investment vehicles.
Profiles of professionalsGaurav P. Gupta holds a Bachelor of Commerce and a Masters of Commerce degree with a major in accounting from Mumbai University in India.
He holds a Series 3 license, which is the national commodity futures license that permits the selling of commodities and future contracts.
He also earned a Masters of Science in Finance from The George Washington University (GWU). While in GWU, he was The Vice President of Trading of Finance and Investment Club.
From June 2005 to May 2006, he worked with The American Council of Life Insurers. He is currently pursuing his Chartered Financial Analyst (CFA) and is a Level II Candidate.
Profiles of professionalsDean A. Daniel has 19 years experience in mergers & acquisitions, valuation and corporate finance. His knowledge of valuation, macroeconomics and business fundamentals complement and strengthen the statistical models used by FCI.
Mr. Daniel studied business and engineering while earning a Bachelor's of Science degree at the US Air Force Academy. He later received a MBA in finance at the Smith School of Business, University of Maryland. Mr. Daniel holds a Series 3 and Series 65 license.
Program Name Financial Commodity Investments
Fund Category Option selling Strategies
Portfolio Manager Financial Commodity Investments
Minimum Investment $50,000
Onshore/Offshore Yes/No
Management Fee 2%
Incentive Fee 20%
High Water Mark Yes
Hurdle Rate No
Subscriptions Daily
Redemptions Daily, 15 days notice
Reports Daily and Monthly Statements
Prime Brokers Man Financial
Auditor Spicer Jeffries LLC
Legal Counsel Ruddy Law Office, PLLC
Financial Commodity Investments (FCI)“Absolute Returns in an Uncommon Market”
462 Herndon Parkway
Suite 205
Herndon, VA 20170
703 435-2777
Fax: 703 787-0111
www.financialcii.com