Kintore, the new investment system based on gold from Insch has seen a return of 11.5 per cent in its first month of trading client capital.
Insch Kintore is entirely algorithmic and the company says that ‘for reasons of performance and topicality, we expect this coverage to intensify’.
The company also points out that during its first month most gold funds, ETFs and miners suffered heavy losses.
Insch Kintore trades gold as a base ‘currency’ against six other currencies (USD, AUD, JPY, EUR, CHF and GBP).
The firm writes: “The idea of treating a commodity as a currency is not new or unique (see Nomura Returns Focus, ‘Making commodities work for you’ as a recent example). What is unique is using the very successful, time-proven matrix methodology that Insch uses in its currency management program, Insch Kintillo ICP.”
The Insch Kintore system has bi-directionality, transparency and liquidity, the firm says. “Insch began the initial research into Insch Kintore over 18 months ago. Beta test version(s) were then paper traded for a very considerable period of time. As is the process, for the last six months, it has traded proprietary capital. Theory often fails the test of practical market examination but not in our testing to date of the Kintore system.”
The system is entirely systematic. “Price is the dominant input upon which a number of proprietary algorithms determine directional trades. As always, the key to success lies not in getting the market direction right but in the risk management of each position and of the total portfolio. Discipline is key. The maximum gearing employed by Insch Kintore is times two.”
The company claims that Insch Kintore is a true ‘hedge’ fund. “It has absolutely zero directional bias. This makes it a very rare commodity indeed. Most hedge funds do have a bias in terms of market direction that is often based on manager experience or market view. (For which you may read ‘ego’ and ‘emotion.)”