Why is it that when you construct a portfolio of seemingly the best CTAs, so often the future performance falls far short of expectations? It doesn't seem to matter how high the CTA returns were, or how much due diligence you perform and how thorough your analysis of each CTA's results, their performance after you start trading your portfolio is, at best, unremarkable? The answer is simple, yet vexing: the methodology most investors use to build a portfolio of CTAs is wrong. It simply does not work. Yet, time after time we fall back into the same old traps because heretofore there has been no viable alternative.

Over ten years ago, the principals of VanKar Trading Corp ("VanKar") decided there had to be a better way of selecting CTAs and they set their sights to find it. Now, years later, after an intensive research campaign by programmers and professional traders, the VK-Alpha CTA Selection Model researches, ranks and recommends the CTAs that have the highest statistical probability of achieving superior risk adjusted returns. Our model operates as the cornerstone of our Managed Futures investment program by providing a consistent, structured and proven method with a significant long term advantage over traditional CTA selection methods.

We have compiled an enormous database of over 20 years of results from the most active CTAs in the Managed Futures industry. The results are filtered and normalized, and then entered into the VK-Alpha CTA Selection Model. The model ultimately produces a "fingerprint" for each CTA that summarizes that particular CTAs key characteristics. These characteristics are both manager-specific (performance, risk, markets traded, etc.) and general economic (interest rate levels, overall market volatility by markets, etc.). We then rank CTAs from highest to lowest based on expected risk-adjusted returns over the next twelve months. These results allow us to predict which CTAs will out-perform and under-perform the other CTAs and the market in general. These quantitatively based rankings act as the foundation of our ability to create portfolios of CTAs that we believe will consistently outperform other CTA based benchmarks, portfolios and Funds.

Our work in selecting appropriate CTAs is the product of in-depth discussions with our clients in order to determine their requirements with respect to acceptable risk, type and size of CTA. Figure 1 below demonstrates the performance of the model versus a popular CTA benchmark since 1995.

This graph clearly shows that the VK-Alpha CTA Selection Model can help you assemble a portfolio which will, over time, provide a significant long term advantage over traditional investment portfolios.

VanKar offers a dynamic new approach to alternative investments. We at VanKar have spent many years developing the VK-Alpha CTA Selection Model technology We believe that the technology will allow us to successfully outperform the performance of both traditional and current alternative investment managers.

We believe that our technology provides the best risk/reward potential available in alternative investments today. I am proud of our model and will be happy to discuss how to make it work for you. My contact information is shown below.

Emil van Essen
President Managed Futures
VanKar Trading Corp
(312) 578-0225.
emilv@vankartrading.com


THIS COMPOSITE PERFORMANCE RECORD IS HYPOTHETICAL AND THESE TRADING ADVISORS HAVE NOT TRADED TOGETHER IN THE MANNER SHOWN IN THE COMPOSITE. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY MULTI-ADVISOR MANAGED ACCOUNT OR POOL WILL OR IS LIKELY TO ACHIEVE A COMPOSITE PERFORMANCE RECORD SIMILAR TO THAT SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN A HYPOTHETICAL COMPOSITE PERFORMANCE RECORD AND THE ACTUAL RECORD SUBSEQUENTLY ACHIEVED.

ONE OF THE LIMITATIONS OF A HYPOTHETICAL COMPOSITE PERFORMANCE RECORD IS THAT DECISIONS RELATING TO THE SELECTION OF TRADING ADVISORS AND THE ALLOCATION OF ASSETS AMONG THOSE TRADING ADVISORS WERE MADE WITH THE BENEFIT OF HINDSIGHT BASED UPON THE HISTORICAL RATES OF RETURN OF THE SELECTED TRADING ADVISORS. THEREFORE, COMPOSITE PERFORMANCE RECORDS INVARIABLY SHOW POSITIVE RATES OF RETURN. ANOTHER INHERENT LIMITATION ON THESE RESULTS IS THAT THE ALLOCATION DECISIONS REFLECTED IN THE PERFORMANCE RECORD WERE NOT MADE UNDER ACTUAL MARKET CONDITIONS AND, THEREFORE, CANNOT COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FURTHERMORE, THE COMPOSITE PERFORMANCE RECORD MAY BE DISTORTED BECAUSE THE ALLOCATION OF ASSETS CHANGES FROM TIME TO TIME AND THESE ADJUSTMENTS ARE NOT REFLECTED IN THE COMPOSITE.