Eckhardt takes a scientific approach to market dynamics and Alpha capture, using volatility metrics for both risk management and trade signals. The principles are “Risk First, Capture Second” applying techniques that react quickly to evolving market conditions. The objectives are twofold, to always deliver positive returns through serious market dislocations, and to be additive to investor returns during “normal” conditions. Eckhardt aims for low or zero correlation to markets, including Commodities, to achieve these objectives. The Fund uses complementary but diversifying strategies, Volatility-trend, Reinforcement Learning and Non-trend. “Evolutionary Computing” techniques ensure each strategy remains robust and true to the objectives.
Latest Meeting Note
Meeting 15 Jun 2021
Eckhardt Trading Company (ETC), a pioneer in the Managed Futures space specialising in short-term trading strategies, partnered in October 2020 with Investcorp-Tages Limited to launch the Tages Eckhardt Systematic Short-Term UCITS Fund. ... Read more
Eckhardt Trading Company (ETC), a pioneer in the Managed Futures space specialising in short-term trading strategies, partnered in October 2020 with Investcorp-Tages Limited to launch the Tages Eckhardt Systematic Short-Term UCITS Fund. The uniqueness to Eckhardt's strategy lies in their focus on volatility, and how they use it as a key predictive metric of price movements, with the aim to help reduce the lag often associated with price-only signals. Further, the short term nature of the strategy and focus on non-trend systems helps to produce a differentiated return stream compared to the average trend following strategy. The portfolio consists of trades derived from three core systems: short term volatility trend, pattern recognition, risk-off alpha strategy. The short-term volatility trend component uses the rate of change of volatility for entry and exit points across short time horizons, leading to typically earlier entries and exits than traditional trend managers. The pattern recognition engine trades recognisable patterns in the behaviour of volatility across 70 markets based on historical market data, with an average holding period of 2-5 days. Finally, the risk-off alpha strategy aims to capture alpha across the portfolio during volatility spikes and can participate in high vol market conditions when other systems do not. Research is at the heart of the firms culture and their trading strategies, with all systems going through a rigorous validation process before entering the live portfolio. ETC's risk framework is based upon utility theory and is the first step in any trade generation and ensures that the systems best ideas make it into the portfolio with the proper weighting.