Currensee offers retail investors the chance to mimic currency strategies of professional traders
In a market thirsty for diversification, Currensee Inc. might be onto something with its platform offering regular investors quick and easy access to a variety of currency-trading strategies.
Still, financial advisers and investors should take note of a few caveats.
For a $5,000 minimum, investors can allocate assets to any of the 20 professional currency traders that are identified on the platform as Trade Leaders.
Each trader is applying his or her own style and strategy to turn a profit in the $4 trillion global currency market. The trading is essentially a non-stop game of going long and short various currencies in what is known as pairs trading.
According to Currensee chief executive Dave Lemont, the professional traders are thoroughly vetted and closely monitored. But the platform, which launched a year a half ago, is focused on what he described as emerging managers — meaning that they might only be managing between $1 million and $50 million each.
The basic requirement to be a manager on the platform is a minimum of six-months trading experience with no declines of more than 10%. Managers must also be trading currencies as a profession, which includes being self-employed.
“People managing a billion dollars don't make the returns anymore, and that's why we're trying to catch people who are on the upswing,” Mr. Lemont said.
The platform is being marketed for its diversification benefits, among other things, and investors are encouraged to mix and match traders on the platform to build their own portfolios.
According to Mr. Lemont, since inception the combined Trade Leader portfolios have not had a single negative month.
Among the list of individual traders, however, investors will find a little bit of everything. “Some of the traders will hold a trade for minutes or seconds, and some will hold it for days or weeks,” he said.
So far this month, the individual Trade Leader performance has ranged from a 4% decline to a 20% gain. The S&P 500 Index, over the same period, gained 3.4%.
The site provides ample tools for evaluating the traders, including full portfolio disclosure and a list of every trade made since they joined the platform.
The platform also includes an automatic stop-loss feature that will move an investor out of an account if it declines by 30%, but investors can customize those stop-loss features to kick in whenever they desire.
