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FOREX TIME (FXTM) PAMM ACCOUNT INVESTMENTS EXPLAINED
PAMM: Portfolio Asset Management Mechanism
PMD: Portfolio Management Department
The FXTM PMD leverages its forex industry knowledge and superior technological ability to take advantage of the forex market as a separate asset class in its clients' overall portfolio. In doing this, and acknowledging that there are skillful traders with viable trading strategies in the market, FXTM’s PMD invites any traders who deem themselves capable, to provide their own trading strategy(ies) by joining the PAMM program.
FXTM creates different Trading Portfolios which are categorized based on many risk metrics as aggressive, balanced and conservative.
Example of PAMM Investment Scenario
Investor Charlie, Investor Alex and Investor Chen Join
Having seen the results of the different portfolios, Forex Time (FXTM) investors Charlie, Alex and Chen decide to invest in FXTM PAMM.
The PMD's next step is to align PMD Investors' respective profiles with suitable portfolios.
After the obligatory suitability assessment, all investors are categorized by the FXTM PMD as aggressive. Investor Charlie invests $2,000, Investor Alex invests $5,000 and Investor Chen invests $3,000. The balance of the respective FXTM PAMM Portfolio is now $10,000.
FXTM PAMM Portfolio After the First Period of Trading
The first period of trading is successful and the FXTM PAMM Portfolio achieves a 30% return ($3,000) on the initial investment ($10,000). The FXTM PMD is paid the performance fee of 20% ($600). The balance of the respective PAMM Portfolio is now $12,400.
The profits ($2,400) are distributed between the investors based on their initial deposit in the FXTM PAMM and are divided as follows:
With an initial investment of $2,000, Investor Charlie's share will be $480 (20% of $2,400)
With an initial investment of $5,000, Investor Alex's share will be $1,200 (50% of $2,400)
With an initial investment of $3,000, Investor Chen's share will be $720 (30% of $2,400)
Investor Charlie and Alex Make Withdrawals
Before the beginning of the second period of trading, Investor Charlie withdraws the profits he earned during the first period ($480). Investor Charlie's capital remains $2,000.
Investor Alex withdraws $200 and reinvests the remainder in the respective FXTM PAMM portfolio. His total investment with the FXTM PMD is now is $6,000.
Investor Chen reinvests all of his $3,720 in the respective FXTM PAMM portfolio and an additional $280. His total investment with the FXTM PMD is now $4,000.
Investor Khalid hears about the success of the FXTM PMD and the PAMM Portfolios, takes the suitability test and qualifies for investment in the aggressive portfolio. He decides to invest $8,000.
New Portfolio Balance = $20,000 ($2,000+$6,000+$4,000+$8,000)
After the Second Period of Trading
The second period of trading is also successful. The FXTM PAMM Portfolio achieves a 25% return ($5,000) of the new portfolio balance ($20,000). The FXTM PMD is paid the performance fee of 20% ($1,000). The balance of the respective PAMM Portfolio is now $24,000. ($20,000 + $4,000)
At the end of the second period of trading, the $4,000 in profits will be divided as follows:
- Investor Charlie: $400 (10% of $4,000)
- Investor Alex: $1,200 (30% of $4,000)
- Investor Chen: $800 (20% of $4,000)
- Investor Khalid: $1,600 (40% of $4,000)
* This example is intended to serve as a visual demonstration of how the FXTM PAMM Program works. It is indicative only and by no means should it be deemed a guarantee of any possible future performance.
Note: Past performance of the FXTM PMD is not a guarantee of future results and any forecasts are not a reliable indicator of future performance.