managed account Q&A

Dear FF members,

I'm planning to subscribe to manage accounts, but i do not have any experience in it,

1. Could you advise me on what to look/ask for managed account ?
2. Anywhere to look for them? (google too much info )
3. Reasonable monthly/annual return?
4. Fees?
5. Add more if anything i left out. Thanks for the help



Appreciate the help+advise.


Thanks,
Paogeh

I track several account managers. You can check out my page:

http://fxmanagers.info

http://www.barclayhedge.com/ is an authoritative fund tracking service. They track both small and large Forex trading funds. But I should warn you that the funds that accept small amount investments (below $50,000) are usually either not very successful or even outright scams.

i have to disagree with the above, i hold a small number of managed accounts and have done so for many years. I do NOT limit these positions to those who have over 50k to invest. It comes down to the individual manager and his skills/experience.

In reply to the OP, i would look for min 1 years LIVE track record. I would ask for references, and never pay more than 25% in fee's. I do not however hold managed accounts for my own gain like most others, the fee's i charge go 100% to charity, and i look to help those who are by no means rich.

BUT - you have to do a lot of digging to find a good manager, as mentioned there are a lot of scams in this area. I have heard of managers taking 2 accounts and gambling one of them long while the other is short, end result is that one is empty within hours and the other has seen 300% + growth in a day. They then ask for their fee's very quickly.

Always conduct your own research on your manager, and make sure the history is legit.

Most importantly - if you find a good one - KEEP HIM/HER!
(and maybe buy them a bottle of scotch every xmas )

All fund managers (of managed accounts) with more than 15 clients and/or over $250k under management must be registered with the CFTC/NFA as a CTA. Never give power of attorney to someone who is not a registered CTA.

To become a CTA, an individual or a company's AP must pass the Series 3 and possible the Series 34 exams. This at least gives you the assurance that they have SOME idea of how the markets work, how to manage risk, and how to abide by the law. Obviously, there are no absolute guarantees.

Many startup CTA's will accept less that $50k if they are new and trying to build a track record. Most CTA's that have a good track record already established will require more. This only makes sense, if you can attract big money, why waste resources on the small fish. Each client has a cost attached to him/her. As a CTA you have expenses for accounting, tax preparation, NFA membership dues, (possible) compliance advisor fees, and other expenses (office space, marketing, etc). Anyone with less than $25k will most likely cost the CTA more than he will earn from management and incentive fees.

Remember, most professional traders don't have the astronomical returns boasted about here. If you can find a manager that consistently returns of 10-20% a year, with moderate DD, then you have a real star handling your money.

Look for CTA's on the various databases, such as:

http://www.autumngold.com
http://www.barclayhedge.com/
http://www.absolutereturns.com/
http://www.cta-info.com/

Hope this helps.

Happy trading,
Art

That's not true in general. That might be true for the US, but not here in Europe.

Hi Xaron,

I am referring to the US only. I am not familiar with laws outside my own country.

Alright. Then you should add that information next time because there is a world outside the US. No offense.

Xaron,

No offense taken; it's easy to forget not everyone is under the strong arm of the NFA/CTFC. I'll try to be more considerate in the future.

A piece of paper does not make a good trader/manager, just because something has a government stamp on it does not make it trustworthy and I would actually argue the other way around.

There are thousands of managers doing fantastic jobs without needing gov. approval. We should stop looking for government approval on everything. Natural market forces will sort the bad from the good on their own much better.

I'm sure most of the traders and their bosses that caused the trouble the last few years were all fully licensed and compliant.