A Forex managed fund is a pool of investments that are managed/traded by experienced traders who have documented statistics of their trading funds’ returns. Here we are referring to Foreign Exchange or Currency trading.
Money is pooled together with other investors under a single account where the fund manager buys and sells currency pairs on behalf of the investors to hopefully generate a positive return.
The individual investors remain in control of any deposits or withdrawals they make into the fund whilst the fund manager handles all day-to-day trading and trade management.
Managed Forex Funds in Australia require an Australian Financial Services License (AFSL) to operate. This is a requirement from the Australian Securities and Investment Commission (ASIC). They oversee all financial institutions in Australia.
ACY Securities currently works with many Forex-managed funds both locally and internationally.
What types of fees does a managed fund charge?
- Management Fee – this is often a monthly fee and remains consistent. It is calculated as a percentage of an individual investor’s total investment amount. This can fluctuate depending on the funds’ performance. For example, a managed fund may charge a 2% management fee. Every month, each individual investor will be charged 2% of their account balance.
- Performance Fee – A monthly fee charged as a percentage of profits earned for each individual investor. This percentage is often reflective of the skill of the fund manager and can vary between managed funds. Usually seen anywhere between 12 – 30% of profits earned and charged monthly.
Also, there are your standard brokerage costs involved which are in line with the broker used by the managed fund. These trading costs are reflected within your account as each trade is transacted.
How do people get access to a forex-managed fund?
Research.
There are many ways people can access a forex-managed fund. This would vary according to each global region. Investors can get access to managed funds internationally by liaising with the relevant managed fund and opening a trading account with their selected broker.
ACY Securities conduct relevant due diligence on partnered fund managers to ensure managed funds are operating within their relevant compliance guidelines.
How can a trader start their own forex-managed fund?
This is a lot more difficult for individual traders and again varies significantly according to region.
In Australia, the trader would be required to acquire a valid Australian Financial Services License (AFSL).
How does a forex-managed fund work in terms of allocating trades to client accounts?
This depends largely upon the fund manager. Generally, a fund manager allocates trades on their master account (MAM account), which is then allocated to each client account.
- Lot Allocation (trade size)
- Percentage Allocation (of trade, account, or profit size)
ACY Securities supports fund managers across all allocation methods.
What is the most common trading platform used by forex fund managers?
The most widely used platforms for FX fund managers are MetaTrader 4 and Metatrader 5.
More specifically, they tend to use Meta FX Multi Account Manager (MAM). ACY provides both MT4 and MT5 trading platforms plus Meta FX for traders and fund managers.
This means you can get on with the business of analyzing the global markets and all the administration, payments, and platform support are taken care of.
Do all Forex brokers offer a forex-managed fund service?
Managed Forex Funds are not offered by a broker but by individuals and/or companies who will trade through that broker. Forex Brokers may or may not allow fund managers to trade on their platforms.
It is always best to check which Forex broker a fund manager uses, especially the brokerage fees. ACY Securities has always welcomed reputable fund managers (globally) to utilize their services in offering clients a low-cost trade environment with outstanding execution speeds.
What types of services does ACY provide a forex-managed fund?
ACY provides Fund Managers with access to MT4/MT5 & MetaFX platforms across one of the largest product offerings.
- Forex
- Indices
- Precious Metals
- Commodities
- Shares
- ETFs
- Cryptocurrencies
ACY also offers Fund Managers their own dedicated Institutional Business Manager, Real-Time reporting, and the social trading platform, Finlogix, for charting and financial widgets.
These features extend as a bespoke solution for Fund Managers.
How can a new fund establish a proven track record to give confidence to would-be investors?
Managed funds should publish their performances on their website and on websites that allow the full trading history to be accurately shown.
However, ACY offers all fund managers and traders to participate in the Trading Cup.
The Trading Cup is a one-year trading contest that allows individual traders or fund managers to showcase their trading performance to the world.
On top of the incredible prizes, you have the opportunity through your skill to get on the top 10 leaderboard, which is an incredible display of talent to potentially attract new traders to your fund.
Click here to find out more about the prizes and opportunities.
How can ACY Partners help you?
At ACY Partners, we can help you establish your Forex managed fund, so you can concentrate on trading and we handle the backend requirements.
No matter if you are based in South Africa, Vietnam, Australia, Malaysia, Indonesia, London, Germany, France, or Thailand, our team can help set up your managed fund service.
Why not jump on a call with our team today so we can get clear on your goals and expectations, and see if we can help you.