Melissinos Trading can help traditional long-only portfolios perform better over long periods of time, especially during equity bear markets and sudden market shocks that occur due to terror attacks, weather-related incidents, changes in fiscal and monetary policy, flash crashes, etc.

In general, we can help traditional portfolios:

– Increase average annual returns
– Reduce volatility of returns
– Reducing the overall portfolio’s maximum and average drawdown (loss)

We try to accomplish these by doing the following:

– Do not only trade stocks & bonds but all available markets, commodities & currencies as well
– Do not only go long, but go short in downtrends and take no position during sideways trends
– Hold and possibly add to winning positions
– Reduce risk and eliminate losing positions

As little as a 10% allocation to Melissinos Trading can potentially improve the long-term performance of a traditional buy-and-hold portfolio.

Note: The diversification benefits of Trend-Following and Managed Futures, in general, is widely recognized in academic research. See “Litner Revisited, A Quantitative Analysis of Managed Futures“. Prospective investors must understand that the favorable results in this hypothetical analysis depend on Melissinos Trading periodically outperforming other investments within the portfolio.

Diversify

The graph above illustrates the difference between two hypothetical $1,000 portfolios. The first portfolio includes an allocation mix of 50% Stocks (S&P 500 Index), 30% Bonds (U.S. 10-year Note) and 20% Real Estate (iShares US Real Estate; ticker IYR). The second includes a mix of 40% Stocks, 24% Bonds, 20% Melissinos Trading and 16% Real Estate. Investors generally invest in these indexes with the intention of capital preservation, growth or income. Melissinos Trading represents the Trend-Following component. Sharpe Ratio uses a 0% risk free rate. Sortino Ratio uses a 0% risk free rate. The MAR = Annualized Return / Worst Loss. An investor cannot directly invest in an index. An index does not reflect fees that may be charged to an investment vehicle that is based on the index. Data is obtained from what Melissinos Trading holds to be reliable sources.

This information is produced by Melissinos Trading, LLC (the “Advisor”). For all of 2011, the Advisor’s performance reflects the composite performance of all accounts advised. Performance includes actively managed accounts with speculative trading profits as the objective. Performance does not reflect the performance of any one account, but rather a combination of the historical performance of multiple accounts and portfolios. Therefore, an individual account and a particular trading portfolio may have realized more or less favorable results than the composite indicates. From January 2012 to date, returns shown are actual returns of Melissinos Trading’s trading program “Eupatrid Commodity Program” as traded in Fund accounts. The returns represent the actual performance of all of the Fund accounts traded as a whole. The performance includes a transition period between November 2011 – December 2011 where no trading took place. Records, which document and support this performance are available upon request. The returns above are net of management fees (paid monthly) and performance fees (paid quarterly net of any new trading profits); fees vary amongst Fund participants. Actual returns of individual Fund participants or private client accounts may deviate from trading program returns depending on trading level, investment timing, & fee differences, among other factors. Further information on performance & method of calculation can be found in the Disclosure Document, which is available upon request. No representation is being made that any account is likely to achieve profits and losses similar to those shown. All information contained here, is subject to change without notice. Important information about the Eupatrid Commodity Program including risks, objective, strategy and fees is contained in the disclosure document. This is not and may not be used as a recommendation or a solicitation.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.”

We offer an investing approach that diversifies across four major asset classes (not just one or two), trades with the trends (both up and down and, at times, stays on the sidelines) and bets small so no one trade can wipe us out.

A completely different approach yields completely different results. We believe our non-traditional philosophy and investment approach accounts for the non-correlated returns we produce, especially versus long-only stocks and bonds strategies.

Our approach serves investors by providing them with a winning long-term strategy that does not perform like the other investments within their portfolio. Over time, holding different types of investments can improve both the absolute and risk-adjusted performance of a portfolio.

A few key points to remember:

– We do not only trade stocks & bonds but all available markets, commodities & currencies also
– We hold no bias in taking only long positions; we’ll go short during downtrends
– We do not maintain fixed allocations, but vary them according to market conditions

To learn more about the role our investment program plays within a traditional portfolio, please read this.

12 Month Rolling Correlation

Past performance is not necessarily indicative of future results.
Alternative investments, including those offered by Melissinos Trading, are speculative, involve substantial risk, and are not suitable for all investors.

U.S. Stocks (S&P 500 Index); U.S. Bonds (U.S. 10-year Note); Real Estate (iShares U.S. Real Estate; ticker IYR); Hedge Funds (Barclay Hedge Fund Index).

This information is produced by Melissinos Trading, LLC (the “Advisor”). For all of 2011, the Advisor’s performance reflects the composite performance of all accounts advised. Performance includes actively managed accounts with speculative trading profits as the objective. Performance does not reflect the performance of any one account, but rather a combination of the historical performance of multiple accounts and portfolios. Therefore, an individual account and a particular trading portfolio may have realized more or less favorable results than the composite indicates. From January 2012 to date, returns shown are actual returns of Melissinos Trading’s trading program “Eupatrid Commodity Program” as traded in Fund accounts. The returns represent the actual performance of all of the Fund accounts traded as a whole. The performance includes a transition period between November 2011 – December 2011 where no trading took place. Records, which document and support this performance are available upon request. The returns above are net of management fees (paid monthly) and performance fees (paid quarterly net of any new trading profits); fees vary amongst Fund participants. Actual returns of individual Fund participants or private client accounts may deviate from trading program returns depending on trading level, investment timing, & fee differences, among other factors. Further information on performance & method of calculation can be found in the Disclosure Document, which is available upon request. No representation is being made that any account is likely to achieve profits and losses similar to those shown. All information contained here, is subject to change without notice. Important information about the Eupatrid Commodity Program including risks, objective, strategy and fees is contained in the disclosure document. This is not and may not be used as a recommendation or a solicitation.

Historically, trend following performs very well during stock market declines – both sustained bear markets and sudden shocks.

When stocks fall, overall market volatility tends to increase in many different asset classes. Due to our adaptive approach, we can protect capital much more efficiently than static buy-and-hold strategies when volatility increases and trend reversals occur.

Sometimes during equity market stress, we produce profits. In these situations, we’re generally already on the right side of the trends and the added volatility helps us. Our profits may not occur in equities, but other areas like commodities, currencies or interest rates.

Performance When You Need It

Below, the chart shows how Melissinos performs on days when the S&P 500 Index falls at least 2%.

Since January 2011, the S&P 500 Index has fallen at least 2% on 36 separate occasions. On these days, Melissinos Trading has gained 0.98%, on average.

Days S and P

Past performance is not necessarily indicative of future results.
Alternative investments, including those offered by Melissinos Trading, are speculative, involve substantial risk, and are not suitable for all investors.

This information is produced by Melissinos Trading, LLC (the “Advisor”). For all of 2011, the Advisor’s performance reflects the composite performance of all accounts advised. Performance includes actively managed accounts with speculative trading profits as the objective. Performance does not reflect the performance of any one account, but rather a combination of the historical performance of multiple accounts and portfolios. Therefore, an individual account and a particular trading portfolio may have realized more or less favorable results than the composite indicates. From January 2012 to date, returns shown are actual returns of Melissinos Trading’s trading program “Eupatrid Commodity Program” as traded in Fund accounts. The returns represent the actual performance of all of the Fund accounts traded as a whole. The performance includes a transition period between November 2011 – December 2011 where no trading took place. Records, which document and support this performance are available upon request. The returns above are net of management fees (paid monthly) and performance fees (paid quarterly net of any new trading profits); fees vary amongst Fund participants. Actual returns of individual Fund participants or private client accounts may deviate from trading program returns depending on trading level, investment timing, & fee differences, among other factors. Further information on performance & method of calculation can be found in the Disclosure Document, which is available upon request. No representation is being made that any account is likely to achieve profits and losses similar to those shown. All information contained here, is subject to change without notice. Important information about the Eupatrid Commodity Program including risks, objective, strategy and fees is contained in the disclosure document. This is not and may not be used as a recommendation or a solicitation.

The exchange traded futures that we trade are taxed differently than typical securities.

Trading futures markets comes with several advantages.

60% Long Term Gains / 40% Short Term Gains. Futures markets are marked to market at the end of ever year. No unrealized gains exist. Regardless of holding period, gains are treated as 60% long term capital gains and 40% short term capital gains.

No Trade by Trade Accounting. Futures investments do not require the accounting of individual trades. Unlike when investing in stocks, this rule saves you tons of time and effort from having to peruse through pages of brokerage statements.

No Capital Gains Paid When Withdrawing Capital (fund investors only). Limited partners do not pay capital gains on the difference between their sales price and purchase price since they have already paid tax via their K1 figures each year.

Losses Can Be Carried Backwards Three Years. If you lose money in any year, you may offset prior years’ gains up to that loss amount.

No Wash Sale Rules. In securities, a wash sale is when an individual sells or trades a security at a loss, and within 30 days before or after this sale, buys a “substantially identical” stock or security.

Performance Statistics

We design our strategy to perform consistently year in and year out.

We believe the odds of an investor making money with us improves as their holding period lengthens. We do not expect to make money every day, month or year but we do aim to achieve profitability ~75% of the time in any 6 to 36-month rolling period.

Returns improve as holding period lengthens:

– We encourage people have at least a 5-year time horizon when considering an investment with us
– Historically, our performance is most consistent in holding periods of over three years
– Opportunity doesn’t always exist, so investors must be willing to sit through poor short-term performance in order to capture the long-term payoff

The chart below shows ECP’s profitability over various time frames.

Time Window Performance

Past performance is not necessarily indicative of future results.
Alternative investments, including those offered by Melissinos Trading, are speculative, involve substantial risk, and are not suitable for all investors.

This information is produced by Melissinos Trading, LLC (the “Advisor”). For all of 2011, the Advisor’s performance reflects the composite performance of all accounts advised. Performance includes actively managed accounts with speculative trading profits as the objective. Performance does not reflect the performance of any one account, but rather a combination of the historical performance of multiple accounts and portfolios. Therefore, an individual account and a particular trading portfolio may have realized more or less favorable results than the composite indicates. From January 2012 to date, returns shown are actual returns of Melissinos Trading’s trading program “Eupatrid Commodity Program” as traded in Fund accounts. The returns represent the actual performance of all of the Fund accounts traded as a whole. The performance includes a transition period between November 2011 – December 2011 where no trading took place. Records, which document and support this performance are available upon request. The returns above are net of management fees (paid monthly) and performance fees (paid quarterly net of any new trading profits); fees vary amongst Fund participants. Actual returns of individual Fund participants or private client accounts may deviate from trading program returns depending on trading level, investment timing, & fee differences, among other factors. Further information on performance & method of calculation can be found in the Disclosure Document, which is available upon request. No representation is being made that any account is likely to achieve profits and losses similar to those shown. All information contained here, is subject to change without notice. Important information about the Eupatrid Commodity Program including risks, objective, strategy and fees is contained in the disclosure document. This is not and may not be used as a recommendation or a solicitation.