WHAT IS LTC-ATF AND WHY DOES IT EVEN EXIST?LTC-ATF is a small fund established to trade in securities denominated in crypto-currencies. The fund's focus is very much on trading rather than investment - it doesn't sit on investments waiting for them to (hopefully) make a profit, rather it strives to buy and sell making profit in a much shorter time-scale. As part of its strategy LTC-ATF now operates pass-throughs to securities which have a significant barrier to entry that would otherwise prevent smaller investors buying them.
The obvious question to ask is "Why bother setting up a fund with such a small amount of capital - couldn't you just use your own funds to trade?". There are a range of reasons why the fund exists - hopefully the give some insight into
the rationale behind the fund and why it operates the way it does. In no particular order :
Funding : Of course I have sufficient funds to use my own capital for an operation this size. But if market conditions (range of securities and volume traded) change such that a much larger operation is desirable then without a track-record it would be hard to raise the funds to take advantage of that.
Fairness : I'm by no means shy about expressing criticism of other virtual securities. It's therefore only fair that I run one myself and give opportunity for those I criticise to reply in like manner. It's my hope (and expectation) that my performance, fairness to investors, reporting standards and transparency will make plain that - whatever else my faults may be - I'm no hypocrite when I complain about others' lack of those same qualities.
Fun : It's far more enjoyable running the fund in public than it was when I just invested my own funds in private.
Motivation : Having a responsibility to my investors causes me to put more effort into my endeavours than I otherwise likely would. If I become lazy, lax or careless then it will become a matter of public record - a great incentive to do none of those.
Start Small : It's painful watching people attempt to create new companies in areas they have no proven expertise in and trying to raise thousand or tens of thousands of BTC right from the start. I'm doing it (what I believe to be) the right way - start small, prove you can do well whilst small then (and ONLY then) expand.
WHAT SECURITIES DOES LTC-ATF OFFER?At present LTC-ATF offers four securities on LTC Global:
LTC-ATF - This is the parent fund. Investors in this purchase units of the fund representing a portion of the assets owned by the fund. This fund does not pay dividends - all profits (or losses) are reflected in a regularly updated and published fund valuation. Liquidity is provided via a constantly maintained bid-wall just below NAV/U. Units of LTC-ATF are valued and transacted in LTC.
LTC-ATF.B1 - This is a bond issued by LTC-ATF. The bond's purpose is two-fold - to retain as much of profit as possible for LTC-ATF investors and to allow trading in BTC-denominated securities with greatly reduced exposure to fund value changes casued by exchange-rate movement. This bond has a face value (and pays dividends) denominated in BTC but transacted in LTC. Dividends are paid weekly at a fixed rate which can be raised by the fund manager at will (but never lowered again whilst there are bonds outstanding). Liquidity is provided via buying back through the market at just below face value and by facilitating sell-back of larger quantities of bonds through direct transfer.
At present 25000 LTC-ATF.B1 bonds have been sold. These have a face value of 0.01 BTC each and pay a dividend of 0.6% of face value each week.
S.BBET-PT - This is a pass-through to the BitBet security listed on MPEx.
S.DICE-PT - This is a pass-through to the Satoshi Dice security listed on MPEx.
PLATFORMS TRADED ON AND DISTRIBUTION OF FUNDSI list below the exchanges/platforms our funds are used on - along with an estimate of the percentage of funds deployed at each location. Some of these ranges are pretty wide - actual funds on each platform varies as profit/loss occurs and needs change. I don't intend to update the percentages too often - they're only there to give a general idea of how funds are distributed. I WILL, however, update the list promptly if we add an extra platform to which we have exposure.
LTC Global : 25%-45%. Majority of funds will usually be here - as we can't use LTC denominated capital anywhere else (there's no meaningful LTC activity on Crypto). This percentage will drop as activity on BTC.CO/BitFunder picks up and we issue new bonds to take advantage of it.
BTC-E : 10%-20%. We hold reserves here (for faster movement between LTC/BTC, to exchange to maintain ratios and to ensure we can maintain bidwalls in the event lots of our Bids get filled).
BTC.CO : 10-30%
BitFunder : 15-35%
Cryptostocks : Currently no funds here.
CoinBR/MPEx : 5-25% CoinBR is a brokerage through which we trade on MPEx (the 30 BTC MPEx registration fee to trade cirectly on there is beyond the fund's budget at present).
WeExchange : 0% Have to pass through this site to deposit/withdraw from BitFunder. No funds are left here for any period of time.
BitFinex : 0%-10% Used to arbitrage LTC/BTC, as an alternative to BTC-E for exchanging.
SUMMARY OF RESULTS TO DATEThe table below shows the overall performance of the fund to date.
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There's a column for each of LTC and BTC showing how the fund has performed measured in that currency. From top to bottom the rows are:
Fund Start : Shows the date on which the funded and the initial NAV/U.
Last Report : Shows the date at which the latest report was produced and the NAV/U at that date (that's the NAV/U after deduction of any management fee) plus the total of all dividends paid to date.
NAV/U Change : The change (growth) of the NAV/U from the fund's start until when the latest report was produced.
Growth (%) : The percentage the NAV/U of one unit has grown since the fund's start.
Days Elapsed : How long the fund had been running for when the last report was produced.
Daily Multiplier : What the starting NAV/U would have to multipled by every day (compounded) to reach the current NAV/U.
Daily Growth : The daily multipler shown as a percentage.
Weekly Growth : How much on average the fund has grown in a 7-day period.
Annual (APR) : What the annual growth would be if the current growth were maintained over a period of 365.25 days.
Whilst these figures DO represent the actual performance of the fund to date they should NOT be taken as any sort of sensible prediction of future behaviour. A lot of the growth to date has been achieved with a much smaller amount of capital AND a much lower-valued LTC : both factors which allowed growth of a scale it is unlikely can be sustained.
No promises or predictions are made, intended or implied as to future profitability.
DETAILED HISTORICAL RESULTSThe spreadsheet below shows the performance of the fund since its inception. Do note that the ending NAV/U reported for each week is BEFORE management fees - the starting NAV/U for the following week represents the actual NAV/U units were worth to their holders.
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Here's an explanation of the various columns (from left to right) :
Date : With the exception of the first row (which records the start of the fund) this is the date at which a report was produced. This is typically done each weekend - however it can be done more of less frequently. Shorter periods between reports will only occur if either the fund is in significant profit AND is selling new units (where the ask price gets artificially inflated by unclaimed management fee otherwise) or if a very significant event occurs (such as the closing of GLBSE). For the remainder of this post I refer to each of these periods as "a week" - this should be read as an abbreviation for "accounting period (typically a week)".
Exchange-Rate : The LTC/BTC exchange-rate at the time at which the report was generated.
Start of Week NAV/U : This is the NAV/U of the fund at the start of the week. If the previous week was profitable then this will be lower than the ending value listed for the previous week (due to the reported value at the end of a week being before deduction of management fee).
End of Week Actual NAV/U : The NAV/U of the fund at the end of the week. This is the value before deduction of management fees, but after servicing any outstanding bonds or other commitments.
End of Week Actual Profit : This is the trading profit made by the fund expressed as a percentage. Again, this is before deduction of management fees, but after servicing any outstanding bonds or other commitments.
%LTC : The percentage of the fund's net assets which are denominated in LTC.
%BTC : The percentage of the fund's net assets which are denominated in BTC. Net assets refers to gross assets less liabilities. Bonds are a liability at their face value. So if the fund had BTC denominated assets (cash+securities) worth 30 BTC but had 20 BTC worth (at face value) of outstanding bonds then the fund's net BTC-denominated assets would only be 10 BTC and this percentage calculated accordingly.
Recalced minus E/R NAV/U : This is a (fairly crude) estimate of what the NAV/U would be were any exchange-rate movement ignored. It is the average of (the average fund-split between currencies at the old exchange-rate) and (the average fund-split between currencies at the new exchange-rate). i.e. the calculation assumes that the exchange-rate change happened steadily throughout the week and any change in the split between currencies also happened steadily through the week. Sometimes one (or both) of those assumptions will be wrong. This is just an approximation designed to give a crude view of what part of profit/loss was actually from trading rather than from exchange-rate movement.
Recalced minus E/R Profit : This is the profit that the fund would have made (expressed as a percentage) were the NAV/U at end of week the one recalculated in the previous column.
These last two columns are important - as the maximum rate that LTC-ATF is able to offer on bonds is one third of the average weekly profit adjusted to remove exchange-rate fluctuations. This value needs to be defined ignoring exchange-rate impact as funds raised by issuing BTC-denominated bonds are immune to exchange-rate changes. Below the main table are listed the average gross profit per week (i.e. before management fee) and the maximum rate LTC-ATF is allowed to offer on bonds. Both of those are AFTER adjustment for exchange-rate fluctuations.
At the time of writing this, that figure sits at 3.2%. There is no way a rate THAT high will ever be offered as I believe our results so far are above expectation and we shouldn't need to offer that high to sell bonds anyway (and why pay more than we have to?).