Follow up regarding IFA Gateway proposition
Risk vs Reward, UK capital insurance coverage....and some other questions.
Hi everybody,
I just thought I’d follow up and share some answers from Paul Brown from IFA Gateway, regarding the previous IFA GATEWAY post, recap as pasted below:
Here are some questions from a friend of mine actually.
Just how risky is the investment?
Are the returns back-dated projections or real?
What exactly is being invested into?
The more acronyms involved, the less I trust it.
Just who are the providers? Are they regulated? If so, for what and who by? How long have they been around and what is their financial health? Are there any Audits that can be shared? What precisely is the Investor Protection if said providers go bust or otherwise disappear?
What are the real costs?
The Answers from Paul Brown:
Just how risky is the investment?
On the website (and zipped here) you will find the factsheets for all of our strategies that outline the background behind each strategy, the full past performance history (real, not backdated) and all the relevant risk and return statistics (Sharpe and Sortino ratios, maximum drawdowns, winning / losing percentages, performance against benchmarks etc) to assist the investor in making an informed decision about risks vs rewards.
Are the returns back-dated projections or real?
All past performance data is real, not backdated. This is backed up by the independently verified performance reports for each strategy that are updated quarterly (latest versions attached) and the myfxbook entries for each strategy (see links on the factsheets on the website)
What exactly is being invested into?
Each factsheet contains a summary of the underlying approach and objective of each strategy and highlight the number of subsystems per strategy that ensure non-correlated diversification to limit overexposure in any one area, thereby reducing risk.
The two Crypto strategies (Crypto 01 and 02) invest predominantly in Bitcoin and Ethereum (see factsheet descriptions)
The other four strategies invest mainly in Forex and Commodities (although GMT20 also includes an element of Crypto).
While crypto as an asset class is more volatile than FX and commodities, the returns in bullish crypto markets can be strong and, in some months, quite spectacular. The returns from the FX and commodities strategies aren’t quite as high but are definitely more stable (the winning month percentages are impressive), yet the past returns from a non-crypto Model Portfolio (blend of strategies still averages around 40% per year to the investor net of all fees (see attached Model Portfolios PDF).
Just who are the providers?
Gateway Mastertrade is the strategy provider; our role is to provide the strategies that the investors can choose from.
Pelican / London & Eastern is the FCA regulated (copy trading licensed) Asset manager whose role is to assess the suitability of the investor and to handle AML and KYC when onboarding investors.
Vantage is the (FCA) regulated CFD broker which is where the client money sits in segregated accounts with Barclays and NatWest banks.
Are they regulated?
Pelican / London & Eastern are regulated by the UK FCA and hold a copy trading license https://londonandeastern.co.uk
Vantage are a globally regulated (FCA and others), award-winning CFD broker with 15 years experience and more than 5m registered users: https://www.vantagemarkets.com
As the strategy provider, Gateway Mastertrade does not need to be directly authorized as all business is conducted under the strict supervision of Pelican / Londen and Eastern, and all client monies sit on segregated accounts with Vantage, and all clients have automatic insurance cover of up to $1m per account from Willis Towers Watson, the worlds 3rd largest insurance brokerage.
If so, for what and who by?
FCA regulation explained above
How long have they been around and what is their financial health?
Pelican / London & Eastern has been operating in its current form since 2009.
Vantage have been in business for 15 years and is one of the world’s largest CFD brokers.
Both are very successful businesses with many clients and healthy balance sheets. You can review the website of each company to find out more (links above)
Are there any Audits that can be shared?
All strategies have their performance independently verified at the end of each calendar quarter by Alpha Verification Services https://alphaverification.com
who have been providing independent verification services since 2009.
I have attached the latest reports for all of the strategies we currently offer. The next updates are due at the end of this month so let me know if you would like the latest versions once they are ready, and I will forward these to you in early October.
What precisely is the Investor Protection if said providers go bust or otherwise disappear?
Vantage has partnered with Willis Towers Watson (WTW), the world’s third-largest insurance brokerage, listed on Nasdaq, to provide comprehensive insurance coverage of up to US$1,000,000 per account.
This insurance is free of charge and automatically applies to all investors, so all client accounts are protected by WTW in the unlikely event that Vantage cannot meet its financial obligations.
What are the real costs?
Our Profit Share concept is a mutually beneficial structure. The investor keeps 70% of the profits generated by our trading algorithms, and we keep only 30%. There are no fixed annual management fees so if we don’t generate profits during an investment period, we won’t charge the investor a performance fee for that period.
Furthermore, should the value of an investors account fall due to negative performance during that period, no fees will be charged until the account of that investor is back to its previous highs (high watermark).
We believe this approach is fair, as both parties benefit equally, and our success is directly tied to the investor’s success.
Sounds like a plan to me! This is something everybody can get into, with great reputable world class protection and UK FCA regulation.
Best regards,
