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PAMM Definitions

PAMM

Portfolio Asset Management Mechanism.

FXTM PMD

FXTM Portfolio Management Department.

FXTM PAMM Program

The program that is created and completely controlled by the FXTM PMD, which allocates investor funds in accordance with investment objectives, risks and profile.

FXTM PAMM Account

All clients wishing to invest in the FXTM PMD should open a new account where all of their investments will take place.

FXTM PAMM Portfolio

This is the portfolio that the FXTM PMD will create based on different metrics such as return, volatility, max drawdown, deviation and Sharpe ratio, among others.

PAMM Investor

This applies to clients who are interested in participating in the FXTM PAMM Program. In order to participate they must first take the suitability test; the FXTM PMD will then analyze the results and decide which investments are most suitable.

Strategy Providers

Skillful traders that have a proven track record and choose to share their successful strategies with the FXTM PMD.

Suitability Test

In order for the FXTM PMD to make appropriate investments for PMD clients, we must obtain the necessary information with regards to their investment objectives, financial situation and knowledge and experience.

Return (%)

The actual percentage rate (positive or negative) of an investment during a specific period. [End Strategy Value/Begin Strategy Value -1] * 100 = Return (%)

Sharpe Ratio

Illustrates how good the return of a strategy was for the risk taken. The higher the Sharpe ratio, the better the return for the same level of risk.

Volatility

The average of all the daily returns (positive & negative) for a specific period of time. The lower the volatility, the more conservative the strategy.

Standard Deviation

A statistical measurement that enlightens historical volatility. A more volatile strategy will have a higher standard deviation.

Maximum Drawdown

The maximum % of loss a portfolio would have lost by investing in a strategy. It is calculated as the difference between the maximum and minimum point for the strategy for a specific period. Maximum drawdown helps to determine a strategy’s financial risk.