Minastir Currency Fund is a Swedish registered alternative investment fund according to Act (2013:561) on Alternative Investment Fund Managers. As an alternative investment fund, the fund has more liberal investment regulations and is therefore able to act in a more flexible manner than regular mutual funds.
Briefly about the Fund
Minastir Currency Fund is a directional hedge fund that takes long and short positions in different currencies. Trading is fully automated and managed by our highly sophisticated trading algorithms. The trading algorithms, which are based on artificial intelligence, are able to provide very accurate predictions on future price movements, and thus position trades accordingly. Everything including analysis, order processing, communication with the brokers' trading systems, surveillance and risk management, is completely automatic in order to achieve the highest possible return at the lowest possible risk, as well as to avoid any mistakes resulting from the human factor.
Goal of the Fund
The fund aims to achieve the highest possible absolute return at the lowest possible risk, regardless of the situation on the financial markets. Since the fund only invests in currencies, the fund has low or no correlation with equities or bonds. The goal is to deliver an average return of about 15% annually.
This fund is different from traditional mutual funds in the sense that it only invests in currencies. The underlying reason for this is that the foreign exchange market has several advantages over the stock market or similar securities markets. As an example, the foreign exchange market offers much greater liquidity than the stock market, which means that larger transaction volumes are no issue. Moreover, since the market is open 24 hours a day from Monday morning in Australia to Friday afternoon in New York, this means that it is possible to open and close positions any time of the day, which would not be possible on traditional markets. Altogether, this results in lower risks in the fund management.
Trading currencies is not without risks. In the foreign exchange market, one must make very accurate predictions because, in comparison to the stock market, it is unlikely for one currency to rise or fall in value indefinitely. Currencies are always traded in currency pairs such as EUR/USD, and if the EUR continuously increases in value, it would conversely mean that the value of the USD continuously decreases. Unless one of the currencies goes bankrupt, there will be a correction. At our disposal, we have advanced and proprietary systems to manage this. These are described in more detail below and on the page "Our Technology".
The fund uses highly sophisticated trading algorithms to automatically generate returns. The rationale behind using automatic trading algorithms rather than manual trading is that we believe this leads to higher returns and lower risk. How high the yield is and at what risk depends very much on our skill in the development of the algorithms. Quantitative and systematic approaches are often used in fund management, although we use this, in our case the difference is that the quantitative and systematic approaches are automatically carried out with the help of artificial intelligence.
By using artificial intelligence, we are able to analyze massive amounts of data in a relatively short period of time and also discover patterns and relationships that would otherwise be difficult to detect if the work was done manually. The algorithms are self-learning and the analysis is done continuously, and the result is applied directly in their trading.
We have spent several years solely on analyzing, developing, testing, and reviewing the trading algorithms before we began allowing the algorithms to trade with real funds in October 2012. The algorithms have generated very satisfactory results.