Agustin Silvani, head of trading at MIGFX, was drawn to forex trading because of the unlimited opportunities he saw. Prior to joining MIG in 2001, he worked for consulting firm Cambridge Associates, where his list of prestigious clients included most of the top 10 institutions and pension funds in the United States and abroad with portfolio sizes ranging from $500 million to more than $10 billion. At Cambridge Associates, he was exposed to foreign exchange while studying the trading strategies of various managers. After joining MIG, he started to develop his own trading strategy, which was then spun off into MIGFX.
“Issues that [came] up for us in other markets such as liquidity and availability to trade weren’t a problem in FX, and the volatility was there. This was right after 2001, so the equity markets were down and out, and commodities were as well, so FX was really the place to be,” Silvani says.
MIGFX’s retail program trades with a short to ultra-short term outlook. Its Retail (Growth) Program is specifically tailored to investors seeking above-market returns in exchange for a higher risk profile. “We use technicals and we’re systematic, but not 100%. We’re sort of discretionary in that fashion. We’re very short-term, we do intraday. Long-term forecasting is useless, so that’s why we focus on intraday stuff,” Silvani says.
There are two parts to MIGFX’s trading philosophy. The first is flow-based. “We try to go with the flow instead of picking the top or being contrarian. We try and ride with the flow as long as possible and then flip on that side,” Silvani explains. On the second part, he says “We try to pick what other peoples’ models are saying and trading and we try to front-run those models. There’s two things going on at the same time: the flow-based system and the one where we anticipate the moves and plan accordingly.”
The philosophy has worked out well so far as the MIGFX retail program has returned 17.51% this year through March and has earned a compound annual return (CAR) of 41.26% since launching in 1998. The institutional program, which is a little more conservative, has returned 9.29% through March and has earned a CAR of 23.18% in the same time period.
MIGFX is an offshore entity, incorporated in Nevis, West Indies, with traders in New York and London. It originally began as an offshore fund, which is now closed. Silvani says there are advantages and disadvantages to being offshore. “We don’t have to deal with regulatory headaches, so we can offer more innovative products to our customers,” but on the other hand, he says, “some people are skittish about investing overseas and the reputational problems, which is something we’ve [worked on] for almost 10 years. It took us a while to get over that hump, but once you get a significant amount of money, it becomes pretty easy.” He says MIGFX tries to set itself apart from its competitors by taking advantage of wild swings in the market. “In days of high volatility, most trend-following managers do badly, but that’s when we excel because we thrive on volatility. The worse it is for other people, the better it is for us.”
