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ATTAIN ANSWERS

 

Investment Questions

• Do I earn interest in my account when investing in a CTA, Trading System, or Managed Forex program?
• Futures accounts don't pay interest on their own, but Attain Capital clients can purchase US Treasury Bills in their accounts, which currently pay 4% to 5% interest per year. While some firms may only allow excess margin balances, or money not allocated to a CTA or system to be used to purchase T-Bills, Attain allows up to 80% of the full account value to be put into T-Bills. http://www.attaincapital.com/alternatives/alt_jun1107.htm#Topic
• What is notional funding?
• Notional funds, or notional funding, is in its simplest terms, the ability to use "imaginary money" to fund an investment in a CTA program or trading system investment. A quick example is probably the easiest way to describe it. Say you have a CTA program which has a minimum investment amount of $1,000,000 in its disclosure document. An investor does not actually have to have all $1,000,000 in her account in order to trade the program. Levels of notional funding vary between managers, but for this example, we'll assume this hypothetical manager allows clients to use 50% notional funding. That means the investor only has to have $500,000 in her account, and can meet the minimum investment amount by pledging an additional, "imaginary" amount of $500,000. http://www.attaincapital.com/alternatives/alt_nov2706.htm#Topic
• What's your best system/CTA?
• This is a question we get all the time, and it is the hardest to answer, because every investor is different. The best system for a retiree may not be the same for a young entrepreneur wiling and able to take on more risk, for example. The better question is, what is the best system for me, given my risk profile, and that is the question the Attain staff is here to work through with each investor. http://www.attaincapital.com/alternatives/alt_jul0207.htm#Topic

 

New Accounts

• Can I invest retirement funds?
• Yes, you can trade non-correlated investments like CTAs and trading systems in your 401(K)/ IRA accounts through Attain. Your retirement funds must first beheld at an authorized futures based custodian or trust company which allows futures trading. If you do not already have an account with one of the authorized futures based custodian companies we can help you to establish one via a transfer or roll-over of funds. The trust company holds your funds, then distributes them on your behalf into your own customer segregated account within one of our clearing firms. Fees at the trust companies vary, but are generally in the range of about $200 per year for a custodial fee. http://www.attaincapital.com/alternatives/alt_jul1607.htm#Topic
• What is the minimum I can invest?
• Attain Capital does not have a minimum required investment amount for new accounts, but we feel that those investors who invest at least $100,000 across a portfolio of different CTAs and trading systems are best suited for long term success. Single investments in some Managed Forex programs are as low as $5,000; trading system investments range from $10,000 to $100,000 per system; and CTA investments are generally between $50,000 and $1 Million.
• How do I open a new account?
• You can open a new account via mail, fax, email, or online forms; whichever is easiest for you. CTAs, systems, and managed Forex accounts each need specific documentation, and we find the easiest way to get the documents you will need is to call us at 800.311.1145 to have our Investor Relations Manager walk you through the Account Opening Process.
• Can I fund/hold my account in currencies other than US Dollars?
• Yes, new accounts at Attain can be funded and held in any of the major world currencies. Euro, Yen, Pound, Canadian, Australian, and more. Your entire initial investment will remain in the currency of your choice, with only profits and losses from the trading of the account in US Dollars. But even those profits or losses made through trading don't have to stay in US Dollars, they can be automatically converted for you, or we can convert them at any time per your instructions. This opens up the possibility of investing in top rated U.S. Dollar based futures programs and advisors without taking on the bulk of the currency risk.

 

CTA Placement

• Are CTA performance numbers real? (Is the performance audited? Are there any other controls on the performance these CTAs post?)
• The short answer is YES, CTA's performance numbers are real. They represent the composite performance of all accounts managed by the CTA trading that specific program. As for the results being audited - a CTA must submit an updated Disclosure Document which includes updated performance to the NFA every 9 months for review, and the performance listed in said Disclosure Document is audited during periodic (every 2-3 years) on site audits by the NFA. Some advisors also employ outside auditors to give investors an extra level of comfort. And finally - there are firms like Attain who see the performance in actual accounts of their clients and confirm the clients are getting the same performance as that posted by the CTA. For additional information, please visit http://www.nfa.futures.org
• What about larger CTAs who may have 100s of accounts, won't these accounts have different performance?
• CTA performance results are the composite results of all accounts managed by the advisor. Composite means all of the accounts being traded by a specific program are considered together when computing the performance. If the sum of all the accounts is $100 Million heading into the month, and $110 Million at the end of the month (assuming no fees, additions or withdrawals) the composite performance would then be a positive +10%. In practice, some accounts will do a little better and some a little worse form month to month, due to split fills and other factors - but these differences are usually small (less than 1%) and balance back out in the next month. Per the rules, however, CTAs must insure their fill allocations are done in a fair and balanced manner, and cross test their accounts periodically to make sure no one account or set of accounts is consistently getting better fill prices and therefore better performance. In our experience at Attain, all of our client's accounts are very close in terms of % return month to month, and even closer on a year to year basis.
• Is it possible for a CTA to show only the performance of the best performing account(s) as the entire program's performance?
• As the old line goes - anything is possible, but reporting performance which isn't representative of the overall performance of investor's following the program is illegal. Per the rules, they must show performance which is representative of all of their accounts - no matter the size, fee structure, or performance - as long as those accounts are all following the same program. If a CTA broke the rules in such a manner, they would likely incur a big fine and lose their license to manage client accounts when they got audited.
• One CTA Disclosure Document states: "Our accounts pay between $15 to $30 per round turn in commission depending on the broker." Is the performance calculated using the lower commissions cost? If paying $ 30 per round turn, will the performance be significantly less?
• CTA's reported performance is, by definition, representative of all the accounts of the manager (a composite of all accounts), thus would be calculated using the commission rates of all clients. That means the performance will roughly come out at the average commission rate. For more established CTAs with more assets under management, that rate is usually at the higher end of the range - for smaller CTAs who started their track records with in house or proprietary results - that average can usually be towards the lower end of the range. In general, however, a CTA will not allow a broker to charge a commission amount that will cause that client's performance to be significantly different from the composite performance.
• Will you see the same performance if only doing the minimum investment amount?
• This isn't Vegas - if you're doing just the minimum amount with a CTA, you don't need to worry about not getting VIP treatment. The CTA must treat all accounts equally, and have a method in place for allocating fills evenly between his/her largest account and those accounts at the minimum. When a CTA puts on a trade for say, 100 clients, they put in one bulk order, not 100 separate orders, and then have the trade allocated according to how many each of the 100 clients should have based on their account size. And many CTAs use the average price system - which gives all clients, regardless of account size, the average fill prices across all accounts. About the only benefit to be a larger account is the remote possibility of discounted fees with some CTAs, however an individual usually must become one of their largest clients to qualify for such a discount.
• Do Max DD amounts represent the worst its been during the month, or just on an end of month basis?
• This is an important question - and one many investors miss. Unlike trading systems, where we can measure intramonth drawdowns - CTA performance is reported on a month end basis. So, there is the very real possibility that the intramonth Max DD is actually bigger than the reported Max DD. Many CTAs do this deliberately - as it encourages people to allow the investment to run its due course and not get too focused on the day to day volatility of the account. But part of Attain's due diligence process is to ask for reports on the worst intramonth Max DD in addition to the reported end of month Max DD. Whether the intramonth number is significantly higher (2x to 3x) or not, that's something we're going to pass on to our clients.
• Why are the results for NDX Capital different on your site vs many other websites tracking CTA's?
• In investing, it's always important to read the footnotes. NDX bases their reported returns on a non-compounded basis. That is, they assume the account is brought back to the initial capital level each month, and then show how the account did that month based off that initial capital. All other CTAs we know of base their returns on a compounded basis. That is, they show how the account does month to month on the growing (or shrinking) account balance. What is most likely going on with other websites, is that they are taking the monthly numbers of NDX, and compounding them - showing exaggerated annualized returns and annual numbers. Through our due diligence process we recognized that there was a discrepancy between NDX's disclosure document and the reporting on several other industry databases. The lesson learned in this instance is that investors should always consult with someone like Attain to confirm how the CTA will be managing profits or losses in the account.
• How are the recommended CTAs on Attain's site chosen? Is it possible to trust them?
• We choose CTAs by looking at BOTH performance and the advisor themselves. In regards to performance - we look at hundreds of CTA's and dismiss most of them because we don't like something. Perhaps they take fees that we feel are too large or the drawdowns have been so big that regardless of performance, we don't think they are worth the risk. In regards to getting to know the advisor, we do our best to meet personally, face to face with each of the CTAs we recommend. As for whether you can trust them - these are registered individuals who disclose their personal backgrounds, work history, and are subject to a background check by the CFTC for any securities related fraud. It is possible for you to check on the background of the advisors yourself on the NFA web site as well to see if there have been any customer complaints , fines, or sanctions against them. The site is: http://www.nfa.futures.org/ So, we are apt to trust the ones who have been in business for years and don't have any marks on their record, and believe you should too. The other thing to consider is that CTA's get most of their money from incentive fees (a portion of the profits). So it is not in their interest to deceive you in any way that would cause you to lose money. If the customer doesn't make money, they don't make money.
• Are there any lock up periods for my funds invested with a CTA?
• While this one doesn't deal specifically with performance - many investors like to know how fast they can get at their money. Technically speaking, because a CTA investment is done through an individually managed account - your account is 100% transparent and liquid within a days time. However, each advisor does have termination guidelines that investors sign off on before getting started. Some advisors may technically have up to 30 days to exit all existing positions.

 

Investing Retirement/IRA Funds

• Where is my account held?
• All IRAs and 401Ks are operated by a registered custodian or trust company who act as your liaison between your trading account and the IRA. If you do not already have an account with one of the authorized futures based custodian companies we can help you to establish one via a transfer or roll-over of funds. These funds are then distributed into your own customer segregated account within one of our clearing firms (i.e Man Financial or PFG).
• Is there any tax penalty for trading futures in an IRA or 401k?
• No, all investment activity in your account is treated exactly the same as if you were investing in Mutual funds or even holding on to cash. *Hint - IRA funds should be sent to a registered Trust or Custodian BEFORE trading begins; failure to do so could result in early withdrawal penalties.
• Are there any limitations as to how much I can invest?
• Yes, depending on the clearing firm who officially processes your daily trades (i.e Man Financial or PFG) each company has their own policy. PFG has no restrictions on the amount you can invest; however Man Financial allows for only 30% of your total retirement assets to be invested.
• Can you pay for systems and or CTA's out of your IRA account?
• Yes, all trading related expenses can be paid for directly out of the account with no penalty.
• Are there any annual fees or costs from the Trust company?
• Yes, each trust company has their own minimal cost structures. Please give us a call or send an e-mail to invest@attaincapital.com for a list of the recommended trust companies and their fees.

 

Attain's Flag Rankings

• What are Attain's rankings based on?
• Attain's ranking model has been 5+ years in the making, and is a purely statistical ranking based on over 25 different metrics measuring performance, risk, experience, and more. The rankings are designed to show which programs are consistently amongst the top rated across all of the different statistical measures important to this type of investment. We are not content to merely show you the best performers this year or a list of the top returns of all time, and instead want the rankings to reflect the risk of the program, consistency of returns, and experience of the manager as well.
• What do the different number of 'Flags' signify?
• All programs are ranked in each category, and then an overall ranking is computed. So a program which is ranked between #10 and #30 in each category will be ranked higher overall than a program which is ranked #1 in a single category, but averages in the 50s to 100s for the rest of the categories. Programs in the top 20th percentile of the overall rankings are awarded 5 ‘flags’, the second 20th percentile 4 flags, and so on, down to the bottom 20th percentile being given a ranking of just 1 flag. More flags signifies a higher overall ranking.
• Why do a program’s rankings change?
• A program's ranking can change in the main performance tables when switching the table filter, because the rankings are dynamic and specific to the time period you are looking at. So, a program which has had a long history of success, but a below average past 12 months; may be ranked 5 ‘flags’ when looking at the past 5 years, but only a single ‘flag’ when viewing just the past 12 months of data. The rankings are relative to the time frame being viewed, and relative to the performance of all of the other programs in that time period.
• What are the 25+ categories used in Attain’s rankings?
• The metrics used are performance and risk based, with several different time horizons used when looking at performance, and several different risk adjusted ratios such as the Sharpe used to measure risk adjusted performance. In addition, standard risk measures such as Maximum Drawdown and the Standard deviation of returns are used. More unique metrics include the length of the track record, affordability of the minimum investment, and dollar adjusted returns (a manager who made 20% on $100 Million impresses us a lot more than one who made 20% on just $300,000).
• Are the ranking categories the same for CTAs and Trading Systems?
• The rankings vary slight for these two investment types, to reflect their different structures. For example, a Trading System does not have any Assets Under Management – and a CTA does not have a monthly cost as a system does.

 

Using the Website

• How do I see a table listing programs’ previous month’s returns?
• The default view for the performance tables is the last 36 months, with an average return listed for that period. To see how all the programs did last month, or rank them on last month’s performance, click the “Add to List” arrow on the far right of the performance table, and choose ‘Latest Month Return’ from the drop down menu. This will add the monthly return to the table, where you can them click on the header name to sort by highest to lowest monthly return from the latest month.
• How do I view more CTAs or Trading Systems?
• The default view for the performance tables is to Attain’s recommended list. To view the full list of 500+ CTAs, 100+ Trading Systems, and 30+ Managed Forex Programs, click on the ‘All Programs’ link in the Blue ‘Filter By’ column on the right of the page. It is the 4th link down (and called ‘All Trading Systems’ on the trading systems page). Please note that the link at the bottom of the table named ‘View all CTA programs at once’ only shows all of the programs in your current filter on one page, instead of 20 per page.
• Why are there no CTA programs listed with minimums over $1 Million?
• The default view for the CTA performance tables is only programs with minimums of $1 Million or less. To view programs with minimum account requirements over $1 Million, click on the 4th checkbox down under ‘Minimum Investment’ in the Blue ‘Filter By’ column on the right of the page. This will add the high minimum programs to the table.
• How do I add programs to a Watchlist?
• To add programs to a watchlist, simply click the checkbox next to that program’s name, and then click “Add to Watchlist” at the bottom of the performance table. Once they are added, that program will be highlighted light blue on the performance tables you’re viewing. To View your watchlist, go to ‘MyAttain’ or click on View Watchlist at the bottom of the performance table, and you will be redirected to your Watchlist within your MyAttain page.
• How do I report a bug or website error?
• Please email a brief description of what you were trying to do on the site when you encountered the error to webmaster@attaincapital.com, and we will get to work fixing it right away.