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Ubique | April 2021 Update

It was the best of times; it was the worst of times…

What a month April turned out to be. First, let us look at the good. We have finally finished all our backtesting and modelling, with our Keeping Up With The Joneses going all the way back to the 1920s. April also saw the fund produce a fantastic return of 8.53% in our live testing, from a total of just 24 trades across the Dow Jones, S&P500 and VIX. We also now have our first investor who shares our vision, who is looking at both investing and bringing some of his clients on board as well. We were also given an account by our broker which they credited for us out of their own pocket for us to do some other testing, and the PAMM and all the legalise was set up so the broker can now accept client funds and have them linked to our fund.


Then a hand grenade went off in our face… Out of nowhere, the liquidity provider (LP) who provides the pricing and feed for the VIX was pulled by the broker due to not being able to offer a stable enough feed. As such, one-third of our entire strategy cannot be traded until that is fixed, and as such, we are kind of stuck. The broker has reassured us they are on the hunt to find a new LP so they can offer the VIX again, but as I type, there is no ETA on when this may be. We are now working on what Ubique will look like for the coming months if the VIX isn’t available to us, both in terms of rebalancing the portfolio for just the Golden Ratio and Keeping Up With The Joneses, as well as looking at some of our other strategies to see if any of them work well in conjunction with the other two. So as of right now, we have ceased the onboarding process with our new client and partner until such a time where we have some clarity and direction, both internally and from our broker.

We will, however, continue to walk forward and live test, as it provides additional data points which are always beneficial. For the moment, until we know the makeup of Ubique and what strategies and at what weighting each will have, we will refrain from putting up the numbers etc on the website, as it will be misleading at this stage. Once we agree, then it will be up. This could happen in the next few days if we are able to find a quick resolution that does not compromise anything, however.

The silver lining to this episode though is that we can never underestimate counterparty risk. With investing and trading, most people only ever look at the trading risk itself and discount or ignore other areas in which you can come undone. Thankfully, this happened before we had any client money onboard, although I have been assured by the broker, that any outstanding trades would have been honoured up until expiry which would have been in 9 days’ time. Unfortunately, this is simply an issue that all traders must deal with. All brokers can cease trading of an asset or trading in a particular direction if they so desire. GME long positions being a great example of this from recent times. The lesson here for us is that we must be more robust to deal with this kind of inconveniences and have contingency plans in place.


If you have any questions, or would like to know more about anything mentioned above, feel free to get in contact with us, and we'll happily have a chat with you about it.


For more in-depth analysis, everything is on the website for inspection (www.willowoakadvisory.com/ubique).

Until next time, stay safe and swing easy.