Investing Strategy

Eupatrid Global Trends

Key Facts

100% systematic long-term trend-following approach
Portfolio of global commodity, currency, fixed income and equity markets
14+ years of stable and attractive returns
Non-correlation to both traditional and alternative asset classes

Philosophy and Approach

Eupatrid Global Trends (EGT), our flagship trading program, aims to deliver aggressive returns utilizing a systematic trend-following approach on a large diverse basket of futures markets and select group of individual equities. It does not intend to mimic any benchmark or index, but make the most money possible in all market environments while exercising strict risk management.

The core tenets:

Predicting is unnecessary and dangerous. No one can predict the markets with any consistency, especially emotional investors. Markets simply do what they do. Patterns seldom repeat. Records are continuously broken. Historical correlations break down. Crazy is a constant. We believe a better approach is to let the markets do the hard work and simply follow their lead.

Accept and embrace volatility. We can only capitalize on large trends by being willing to give back profits. This may seem counterintuitive, but in order to realize each trend’s full potential, we must ride it to its end. This means sitting through significant reversals from time to time. Many people equate volatility with risk. We do not. Risk, to us, is the probability of loss of capital. That is, when we risk a small fraction of our capital on a trade, we stand to lose that capital if the price hits our stop-loss. That is risk. Giving back profits is not risk, it’s volatility. Volatility is fluctuating profits.

Strict Risk Control. We don’t shy away from risk. It’s what provides our profits, but we carefully monitor and control it. Every minute of every day we know what our risks are. From the business level to the portfolio, down to each individual position.

Be a generalist. We approach every market the same way. Each market has its own unique set of factors but people are the constant. Trends develop as people react to changing fundamentals, risks and a myriad of other things. All of this gets distilled out in the price, so that’s what we focus on.

Perfect doesn’t exist. Recent performance reinforces beliefs about the markets that can become very dangerous when you tailor your investing strategy to these beliefs. There’s no way to capture the entire recent uptrends in cocoa or interest rates. We know we cannot profit every month, quarter or make money on 100% of our trades. Trying to often leads to big trouble. We prefer sustainability, not perfection.

Why Invest in Trend-Following

The investing community has embraced trend-following, and managed futures in general, more so in recent years. The inflation flare-up during Covid as well as both legs of the 60/40 portfolio declining in 2022 has motivated investors to look for true diversification. Naturally, they found their way (back) to this asset class.

Diverse opportunities. Most portfolios hold a combination of stocks and bonds. Perhaps they also include other “alternatives” that are highly correlated to these traditional assets. Trend-Following firms typically allow investors exposure to other areas such as agriculturals, energies, metals, livestock, currencies, interest rates and even crypto.

Profit from rising and falling markets. Trend-Following takes both long and short positions, thus potentially benefitting from the trends that materialize during positive and negative market environments. Traditional investing approaches can only capitalize on rising markets.

No correlation to traditional assets. Due to its differentiation to most asset-classes and strategies, trend-following can offer tremendous benefits to a portfolio. This characteristic especially comes in handy during equity downturns.

Inflation hedge. This is an under-appreciated one simply because inflation hadn’t been a real concern for many years. But trend-following proved its ability to capitalize when real-world prices rise (e.g. during Covid).

Our Advantage

We’ve learned plenty of lessons over the past 14 years. Specifically, how to stay in business. Running a tight ship — low expenses and focusing only on what we’re good at — is the key to our ability to capitalize on opportunties that pop up unexpectedly.

We eat our own cooking. Our founder, Michael Melissinos, invests the majority of his liquid net worth in EGT. He believes it represents the best combination of safety and aggressive returns.

Continuous track record. EGT was developed by our founder Michael Melissinos; backtested on 30+ years of futures data plus an additional 14 years of real-world trading. We are committed to our philosophy and approach; not interested in continuously modifying it. We want to assure our investors that the strategy that delivered our historical results is the same one they’re investing in today and will be the same in the future.

Aggressive approach. While we’ve been in business since 2011, we’re still young and hungry. We don’t manage money for conservative investors. Our investors are like us — comfortable with above-average volatility in an effort to achieve large gains.

Relationship with investors. Our investors are our family and friends. We think alike and share a similar investing philosophy and risk tolerance. We’re comfortable with the performance characteristics of trend-following. This allows all of us to remain focused on long-term discipline instead of short-term results.

Transparency and liquidity. We only trade highly liquid markets and equities on regulated exchanges. Depending on how investors participate with us, we provide daily or monthly liquidity. No lock-ups or gates have ever been used.

Performance Snapshot

	December	2024	5-Year Annual Return*	Correlation to EGT
Eupatrid Global Trends	5.2%	9.4%	9.1%	-
Equities	-2.4%	24.5%	13.0%	0.06
Bonds	-2.2%	-5.0%	-3.2%	-0.05
Managed Futures	1.1%	1.8%	5.6%	0.64

An investment with Melissinos Trading is for sophisticated investors who are able to bear a substantial or entire loss of their investment. Before seeking our services, please read the investment documents. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Frequently Asked Questions

What kind of market environments are favorable and unfavorable for EGT?

Favorable conditions are when market prices are moving strongly either up or down in persistent manner. Unfavorable conditions are the exact opposite — when prices are moving in a sideways whipsaw-like manner. Good Markets: #1, #2, #3. Bad Markets: #1, #2, #3.

Isn't investing in stocks, bonds and real-estate sufficient enough?

All investments experience extremely rough performance periods. A few recent examples: Inflation/rising rates (’22), PIIGS sovereign debt crisis (’11), Financial Crisis (’08-09) and Dot-Com Bust (’00-03) and the 1990 Recession. Relying on one highly correlated investment to provide all of your investing performance is risky. EGT can help provide similar equity-like returns but without the risk of a left-tail painful outlier loss.

Your returns are volatile. Aren’t you at risk of blowing up?

We take risk very seriously. We are strict with our core capital, but liberal with our profits. Because we allow room for our winners to run, the volatility can sometimes become extreme. This is expected and by design. On average, we risk less than 0.50% of our capital on any individual trade. This, on top of having pre-determined exit points for each position, keeps us away from experiencing a catastrophic loss.

Have you changed your investment approach over the years?

Our philosophy has not changed. We’re trend-followers to the core. Our tactics have evolved a bit, however. We’ve learned a lot over the past 13+ years. Namely, how to increase the odds of not missing opportunities, how to make returns more consistent, how to decrease the likelihood of a large drawdown without sacrificing upside and how to reduce the effect of costly short-term noise. We believe the current iteration of our approach is more robust and reliable than it was in our early years.

DISCLOSURES

Past Performance Is Not Necessarily Indicative of Future Results.

* Performance through Dec-2024. Net of all fees and expenses (performance does not reflect the performance of any one account, but rather a combination of the historical performance of multiple accounts and portfolios). Asset Classes: Equities (S&P 500 TR), Bonds (US 10Y Note), Commodities (GSCI TR), Hedge Funds (HFRX HF Index) and Managed Futures (Soc Gen CTA Index). Alternative investments, including those offered by Melissinos Trading, are speculative, involve substantial risk, and are not suitable for all investors. Before seeking our services, please thoroughly examine our investment documents.

Eupatrid Global Trends trades virtual currency derivatives, specifically CME Bitcoin and CME Ether which may experience significant price volatility and the initial margin for these products may be set as a percentage of the value of a particular contract. Margin requirements for long and short positions can increase if the price of the contract rises or falls. Some futures commission merchants, such as the ones Melissinos Trading uses to trade these products may pose restrictions on customer trading activity in these products, such as requiring additional margin, imposing position limits, prohibiting naked shorting or give-in transactions. The rules of certain designated contract markets impose trading halts that may restrict our ability to exit a position during a period of high volatility.