EEA Futures Fund Limited

Investment Objectives

The Fund was incorporated as a BVI Business Company in the British Virgin Islands and seeks to benefit from capital growth through a carefully constructed proprietary trading system with a target return of 15% + per annum (the “Target Return”).

The Fund’s underlying investment programme is the EEA Futures Programme (the “Programme”).

Under the Listing Rules of the Channel Islands Stock Exchange, the Fund may not materially change its principal investment objectives and policies (as set out in this Offering Memorandum) for a minimum period of three years from the date of listing on the Channel Islands Stock Exchange, other than with the consent of a majority of the Shareholders. Positions taken using liquid exchange traded futures are taken to generate capital growth in the Fund.

Investment Process and Methodology

The Programme employs a 100% systematic proprietary strategy. It takes both long and short positions across a wide range of commodity and financial markets that make up its universe. The strategy is based upon trend following techniques and the empirical evidence that trends, once established, have a tendency to last longer and extend further than most market participants anticipate. It monitors those markets within its investment universe and determines entry points, exit points and position sizes by statistically analysing price momentum and volatility and by identifying support and resistance levels. Risk exposure is monitored daily, and the position sizes are reduced if they exceed pre-determined thresholds. This allows the creation of a number of long and short positions in a range of markets that by their very nature should not be heavily correlated with one another while at the same time maintaining risk levels within the Programme’s limits.

Investment Universe

The Programme will only invest (both long and short) in liquid exchange traded futures and options contracts. This will be across all sectors and will include stock indices, bonds, interest rates, metals, energy, livestock, soft commodities, grains and any other futures contracts providing they meet the liquidity requirements of the Programme .

The vast majority of the Fund’s assets will normally remain liquid. Liquidity will normally be held in cash or treasury bills by the Custodian/Prime Broker or the Banker on such terms as either the Directors or the Investment Manager deem appropriate. The Custodian/Prime Broker will also require liquidity to meet any margin requirements or margin calls that will be subject to market conditions.

Investment Parameters

The Investment Manager will apply investment parameters which are deemed appropriate under prevailing economic and market conditions to seek appreciation in the assets of the Fund, subject to the parameters set out below within the powers given under the Articles:

  1. The Fund will not take legal or management control of any issuer in which the Fund may invest, nor will it purchase securities for the purpose of exercising control or management of that issuer.
  2. The Fund may borrow (as detailed below).
  3. The Fund will invest in liquid exchange traded futures and option contracts in the investment universe as determined by the Programme.
  4. The Fund will not purchase or sell real estate or any option, right or interest therein, provided that the Fund may invest in options in securities issued by companies which invest in real estate.
  5. The Fund may not write any option unless adequate liquid assets are set aside to cover the exercise price of the securities for a put option, or sufficient underlying securities are maintained to cover the position.
  6. The Fund may enter into foreign exchange hedging arrangements in respect of the Fund Portfolio and of the Share Classes whose Operational Currency is not US Dollars to minimise downside currency exposure. There is no restriction on the instruments that may be used by the Fund to effect foreign exchange hedging.
  7. The Fund may not invest in other collective investment schemes.
  8. Except as set out above, there are no restrictions or other limits imposed on the investments which may be made by the Fund.

Full details of the Fund can be obtained by reading the Offering Document