Dighton Capital - Global macro

Investment strategy

The strategy consists of long-term global macro themed positions (from 1 month to multiple years) and short-term more technical analysis based trades (typically held from 1 day to 2 months). A combination of fundamental data interpretation and chart analysis is used for both types of positions. The trades are long or short directional, meaning the portfolio can profit in both bull and bear markets. Each position has a trade plan containing the tactical entry and exit procedure. These usually show a staged position build-up at several price points. When a position is established, the Investment Manager allows profits to run and exits on expected trend reversal points.
The Fund manager trades on high conviction and his tight selection standards reject 9 out of 10 trading ideas.

Long term global macro positions

The approach is based approximately 75% on fundamental data interpretation and 25% on technical analysis. The investment manager identifies global cycles using long term fundamental data and long term charts. Analysis of geopolitics, economics and other fundamental data is combined with technical indicators on long term charts. The positions are held dynamically depending on volatility. These positions can be held from 1 month to multiple years.

Short term technical positions

The approach is also discretionary however more influenced by technical analysis, with 75%, and 25% fundamental based. Chart analysis include (but are not limited to) wave analysis (Elliot Wave), W.D. Gann principles (angles), Fibonacci retrenchments, time cycles, volume indicators, Trix Indicator, divergences and pattern analysis. Fundamental factors will be added to these technical indicators which should support the technical view in order to come to a positive investment decision. These positions are typically held from 1 day to 2 months.

Portfolio & Risk management

Being discretionary in style, the Investment Manager determines which market out of the investment universe promises the best risk/reward potential. This can result in a concentrated portfolio of high-conviction positions, providing the best return.
The Investment Manager applies 3 risk management principles – hedging, stop losses and maximum limiting exposure (margin to equity ratio).

Correlation & Diversification

The portfolio should achieve none or negative correlation to stock and bonds indices. Although the fund trades futures, it is not a systematic trend-following so no correlation is expected with CTA indices, making Dighton Global Macro a diversification in most investors’ portfolios.

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