Trendwatch Asset Management Ltd provides innovative managed spread betting services designed for private clients. Our investment managers carry out all the trades on individual Trendwatch client accounts.
Our primary objective is to deliver market-beating returns, tax-free for UK investors, regardless of market conditions, whilst minimising risk as much as possible.
We believe that Trendwatch was the first company to gain regulatory approval for a managed spread betting service in the UK to be made available to retail investors.
The original Trendwatch Asset Management product (Trendwatch UK Equities, also referred to as “TAM 2” for short) product evolved from Trendwatch, the highly regarded investment newsletter founded in 2000. TrendWatch’s share recommendations are based on a combination of trend analysis (using proprietary market-scanning software) and fundamental analysis. Over the years, TrendWatch has built up an impressive market-beating simulated performance record.
TAM 2 uses the same proven analytical techniques, but with much more flexibility, notably the ability to trade both long and short in all markets – though it will always be predominantly a long equity investment.
In the autumn of 2015, we launched our second product: Trendwatch Global Futures (TGF). This invests primarily in non-equity instruments including commodities, currencies, fixed interest and stock futures. Notionally, 20% of TAM 2’s portfolio is invested in non-equity trades, using the same methodology as TGF. Although past performance is not a guide to the future, the non-equity portion of TAM 2 delivered a 176% gain in 2014.
ADVANTAGES of the TAM concept
Gains exempt from UK taxation: Under current UK legislation, UK taxpayers are exempt from UK income or capital gains taxation on spread betting gains (but note that losses cannot be offset against profits for tax purposes).
Safety: Both Trendwatch Asset Management Ltd and Spreadex are authorised and regulated by the Financial Conduct Authority (FCA). It is an FCA requirement that client money is ring-fenced. In the event of fraud or maladministration that results in the inability of Spreadex to repay the balance on your account in full, the Financial Services Compensation Scheme will make up any shortfall up to a limit of £50,000 per individual claim. Additionally, if Spreadex’s bankers should go bankrupt, you will be covered by the government’s deposit guarantee scheme up to a current limit of £85,000 per claim.
Transparency: Unlike many hedge funds, where you have little idea what the firm or its investment managers are doing with your money, you can see your account balance and open trades whenever you want, 24/7.
Gearing: An advantage of spread betting is that you only have to put up about one-fifth of the money that a conventional investor would need to find. So a TAM investor who invests the minimum sum of £5,000 gains exposure to around £25,000 of assets.
Risk management: No more than around 2% of your total investment is risked on any one trade on TAM’s UK Equities product, and 0.8% on Trendwatch Global Futures (TGF). Thus if something goes wrong with one of the trades in your portfolio, the impact on your overall portfolio is generally minimal.
Track record of market outperformance
Limited liability: Normally, spread betting carries the risk that can lose more than you invest. Because of the way that our products are structured, your account is conducted on a “non-recourse” basis. This means that, in the very unlikely event that either Trendwatch product loses more than the amount you invested, you will never be subject to a “margin call” – a request for additional funds.
Elimination of churning: A manager looking after clients’ money may be paid a broker’s commission based on the amount traded. This creates a temptation to churn – unethically trading more frequently than is beneficial to the client. Firstly, TAM 2 invests at a steady average rate of six new trades per month, whilst TGF trades are placed according to a fixed methodology, thus eliminating any suspicion of churn. Second, any commissions received by Trendwatch are applied on a pro rata basis to your account, not to the investment managers.