FREQUENTLY ASKED QUESTIONS

1. What is Accurate exactly?

It is an Independent Financial Advice Company [EAFI, in Spanish] and was authorised as such by the Spanish National Securities Market Commission [CNMV, in Spanish], on 28 June 2013, and it has been registered, under number 126, in the Administrative Record of Financial Advice Companies of the CNMV since 08 August 2013.

It is authorised by the United Kingdom's financial market regulator (FCA).

It offers investment advice, which is understood as the provision of personalised recommendations to a client, whether at the request of such or at the initiative of the investment services company, with regard to one or several transactions relating to financial instruments detailed in art. 2 of the Spanish Securities Market Law [Ley de Mercado de Valores, in Spanish]. The Independent Financial Advice Company is not authorised to send or fulfil clients' orders as the clients must choose the entity that takes care of rendering the aforementioned services.

It solely and exclusively advises Professional Clients and eligible Counterparts, in accordance with the MiFID classification.

 

2.  How will I receive advice from you?

Our recommendations will always be provided to you via email, on our website and app but you will always have the last word. You can implement our recommendations or stop them at any time, for any reason you deem appropriate, just as you can activate them again.

 

3. Where am I sending my money?

Your money is in an account under your name at TradeStation Securities, Inc. and your daily investments are in a securities account under your name, which is also deposited at Tradestation.

The client sends the money in the currency they choose to the separate account for clients whose custodian is TradeStation Securities, Inc.

The money is then sent internally and ends up in the main Tradestation account with TradeStation Securities, Inc. in Florida, United States.

For further information click here

 

4.  Who is the broker?

Your broker will be TRADE STATION - one of the oldest and most secure brokers in the world. It has the highest rating of all of the “frequent traders” in Barron's ranking. Over the last five years, it has been consecutively nominated worldwide as the best and most secure technological platform. Over the last 13 years, it has been consecutively nominated as the Best Trading System worldwide!

 

5. Who developed the models that the strategies are based on?

They have not been developed by amateurs but a team of traders with over 15 years of experience in managing these types of strategies, under comprehensive and advanced risk monitoring. In addition, the models have been successfully employed in real-life situations since 2008 by means of different institutional vehicles, with better results and lower risks than investments considered traditional and non-complex.

 

6. What kind of security can Accurate Quant offer me as a company?

Accurate Quant is an Independent Financial Advice Company [EAFI, in Spanish] authorised by the Spanish National Securities Market Commission [CNMV, in Spanish], on 28 June 2013, and it has been registered, under number 126, in the Administrative Record of Financial Advice Companies of the CNMV since 08 August 2013.

 

7.  Can I make my investment in a currency other than the Euro?

Yes, investments are accepted in EUR, USD, GBP, CHF, JPY, AUD, HKD and CAD.

 

8. Is there currency risk in the investment?

Your investment will be in the base currency you made the transfer in, although the necessary guarantees that the system uses at any given time will be invested in the corresponding currency and as such there is little currency impact.

 

9. What is the minimum initial investment?

The recommended initial minimum portfolio is 25,000 Euros.

 

10. How should I make the initial contribution?

Once you have opened the account with Tradestation, you will receive an email with your account number and password to access your account via the app and the website.

You can find instructions here based on the currency you would like to make the investment in.

 

11. Can I become an Accurate Quant client?

We are advisors to professional clients, and as such if you are not one or do not wish to be considered one, we cannot advise you.

In order to be considered a professional client, you have to verify your knowledge, experience in financial markets and sufficient economic resources, pursuant to the MiFID.

 

12. Do I have to register with a broker?

In order to implement our recommendations, you have to register via the broker TradeStation, as they have our trading systems ready to be implemented in your securities account. Don't worry, we will help you through the whole process.

 

13. What does the registration process entail exactly?

First of all you have to fill in your personal details on the website, fill in an eligibility and suitability test that will enable us to determine whether our products are appropriate for your investor profile, and provide us with a series of documents to verify the aforementioned information.

If you fulfil all of the requirements legally set forth, and provide the corresponding documents, we will take care of preparing all of the necessary  documentation and provide it to you so that you can review it and sign it.

Once all of the documentation has been signed, an account will be opened for you under your name at Tradestation (JP Morgan) where you will have to transfer the money. Once the money arrives, you will be able to activate the strategy whenever you deem appropriate.

All of the information about your account will be available to you at all times via your smartphone and the website.

 

14. What is my relationship with Tradestation like?

If any incidents arise with Tradestation, we will help you. However, you can always have direct contact with them.

 

15. If you need me to be a professional client, does that mean your portfolios are very risky?

The financial risk of an investment can be measured in many ways, and in many of these our risk is lower than that offered by conventional investments.

However, current regulations categorise our portfolio recommendations as appropriate only for professional clients given that they use financial derivatives and these types of assets are considered complex and difficult to understand. You can view the level of risk here.

 

 16.  If you invest in financial derivatives, can I lose more than I invested?

Financial derivatives operate with guarantees. In other words, it is not the entire value of the investment that is deposited, rather just one part that will pay the accumulated losses or profits at any given time. If my position constantly loses, the guarantee will gradually reduce to the point that if it is not restored, the broker will close the position.

Here is an example that explains how our portfolio works.

Consequently, we have to say that technically, by definition of a derivative in general, the possibility of losing more than that invested is possible. However, the likelihood of this is very low given the characteristics of the assets we use, the fact that they are listed in official markets and that the process is completed via a broker.

 

17. What is the maximum drawdown you have had in the last 10 years? And what is it compared with the Spanish stock market?

The following table shows a comparison of Accurate Quant's maximum drawdown against some of the main stock market indices since 2008.

As you can see, Accurate Quant's levels are substantially lower than those of the stock market indices, and these can be more easily appreciated in the following graph which shows the entire distribution of drawdowns since 2008, including the maximum drawdown.

drawdon analysis

Accurate Quant's decorrelation makes it possible to improve the portfolios that have equity securities by diversifying returns and the different times at which the drawdowns occur. This makes the portfolios more stable, we can see an example of this in the following graph which shows the behaviour of the following since 2008:

  • Ibex 35 (in dark red)
  • Accurate Quant (in golden)
  • Lastly a portfolio that invests equally in Ibex 35 and in Accurate Quant (in blue)

As you can see, the investment in both (in blue) creates the most stable portfolio given that the behaviour of Accurate Quant is independent of Ibex 35. In other words, Accurate Quant earns/loses at different times to when Ibex 35 earns/loses.

To conclude, including Accurate Quant in your current portfolio leads to a strong impact in terms of:

  • Improved returns in the medium/long term
  • Reduced volatility and drawdowns of your portfolio
  • Independence from the market situation, whether bullish or bearish

 

18. What is your management methodology?

Accurate Quant focuses on providing advice regarding actively managed quantitative strategies in order to obtain returns that are independent of the financial markets by using algorithms that aim to benefit from changes whether bullish or bearish.

Our methodology is based on a combination of sophisticated statistical, mathematical, probability and pattern analyses, among others, which are necessary for applying machine learning and artificial intelligence techniques to the financial markets, in order to create products that adapt to and learn from any market situation and add value to existing portfolios by means of their decorrelation and independence from the returns we can find in traditional, passive and indexed investments.

On the basis of all of this, we aim to provide tools that make it possible to obtain favourable results without the exposure or “Beta” to the market being high, therefore becoming an element for diversification and optimisation of the levels of returns and risk of the total portfolio, which on many occasions is highly sensitive to changes in the market whether bullish or bearish.

In order to do this Accurate Quant uses the following among other financial instruments:

  • Stock market indices derivatives (Eurostoxx50, S&P500, Nasdaq100, Dax, etc.)
  • Futures such as government bonds from the USA, Germany, the UK and Japan (Bund,10YR T-Note, etc.)
  • Currency derivatives (EurUsd, EurJpy, EurGbp, etc.)
  • ETFs

Accurate Quant makes the most of its extensive experience to create and implement comprehensive risk monitoring applied to the parameters of volatility, maximum drawdown, recovery of drawdowns, management of extreme changes in the market, VaR, EaR, etc.

And, yes, we have real-life experience of extreme market situations such as the financial crisis of 2008 and the subsequent geopolitical situation to the present day. Our returns and risks have consequently been tested in extreme situations with real money and not with studies on paper.

 

19. How does it differ from an investment fund?

In an Investment Fund your money goes into a shared account with the rest of the investors, whereas here your money is in an account under your name.

Different agents intervene in an investment fund: a management company, an administrator, a broker, a depositary institution and more, but here it is just you, us and the broker.

With an Investment Fund, you adapt to the investment mandate that the manager has, but here we adapt to you.

With an Investment Fund, in the best case scenario, liquidity is daily, but with us it is immediate.

With an Investment Fund you find out about the value of your position, in the best case scenario, one day later, but with us you can find out about it around the clock.

With an Investment Fund you do not know what transactions the manager will make, with us you find out in advance.

An Investment Fund does not have a tax charge provided you change your investment between Funds, you do not pay taxes until you take the money out of the funds. In our case, taxes are paid annually on the basis of the results obtained.

 

 20. On having the money in a foreign account, do I have to declare foreign accounts over 50,000 Euros?

According to the Spanish Tax Authorities there is an obligation to provide information about the bank account when this limit is exceeded (and none of the other exceptions to the obligation to declare apply) regardless of the number of account holders. Information would then have to be provided about the total balances without pro rata divisions, indicating the percentage of the holding.

You can find more information here.

21. What is meant by the fact that your strategies are decorrelated from the market?

As they are decorrelated, our strategies behave independently of the market situation we are in, we do not depend on being in a bullish or bearish market situation, or in an environment of increases and decreases in interest rates. Yes, they do affect us but they do not condition us as our aim is to obtain favourable returns regardless of the market.

 

22. Why do you recommend Accurate to compensate my Investment Fund portfolios?

Given that our management approach is different to the traditional management followed by the markets, the portfolios have to include different investments that have the potential for revaluation but are independent, in order that any poor results at any given time can be compensated by the rest. This makes the portfolios more stable, an example of which can be seen in the following graph that shows the behaviour of the following since 2008:

  • Global equities, for which we have used the MSCI World index (in dark red)
  • Accurate Quant (in golden)
  • Lastly a portfolio that invests equally in global equities and in Accurate Quant (in blue)

As you can see, the investment in both (in blue) creates the most stable portfolio given that the behaviour of Accurate Quant is independent of the world stock markets. In other words, Accurate Quant earns/loses at different times to when MSCI World earns/loses.

In conclusion, including Accurate Quant in your current portfolio leads to a powerful impact in terms of:

  • Improved returns in the medium/long term
  • Reduced volatility and drawdowns of your portfolio
  • Independence from the market situation, whether bullish or bearish

 

23. Is quantitative management better than discretionary or traditional management?

It would be pointless to enter into a discussion about which type of management is better than the other as that would lead to an endless debate. Both types of management are complementary as they offer different ways of having exposure to the financial markets in a diversified manner. This enables us to combine returns linked to changes in the market and returns independent of such, therefore creating a portfolio that aims to remain stable over time. All you have to remember is that we offer a style of management that is complementary to any other investment you could have in your portfolio: variable interest, fixed interest, currencies, raw materials, venture capital, or real estate among others. We are good and, above all, we are different.

 

24. What fees will you charge?

We only earn money if you do. We are in line with you and it is in our interests for your investment to be profitable.To this end we do not charge management fees.We only charge a success fee

And, by the way,our returns are net of all fees.

The success fee tranches are applied based on the amount invested:

Up to € 25.000 : 25%

From € 26.000 - € 70.000: 20%

From € 71.000: 15%

The success fee is applied on a monthly basis with High Watermark.

Copy Trading: in order to provide the infrastructure that enables the automatic implementation of the recommendations by means of “copy trading”, €1.65 is applied per transaction made in the market.

You will be able to view the open/closed positions, losses and profits per position and per total, and so on, in real time on your mobile app.

There are no administration, depositary, fund withdrawal fees, etc. and you are free to stop using our services at any time and at no cost whatsoever.

25. How can I add more money to my account?

With a transfer similar to that made when you open the account. However, if you would like to change portfolio, you should let us know and we will provide it to you.

 

26. How do you make withdrawals of money from my account?

The money is withdrawn from the website using your credentials, at no cost whatsoever.

 

27. Why do you claim to offer something better than discretionary or traditional management?

It would be pointless to enter into a discussion about which type of management is better than the other as that would lead to an endless debate.  All you have to remember is that we offer a style of management that is complementary to any other investment you could have in your portfolio: variable interest, fixed interest, currencies, raw materials, venture capital, or real estate among others. We are good and, above all, we are different.

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