OmniFunds Professional Jeff Drake
The Power of Customization OmniFunds provides users with a good selection of canned OmniFunds developed by IFM. But many users have their OWN ideas that they would like to investigate. OmniFunds Professional allows subscribers to create their own OmniFund based on any idea that they might have.
The OmniFunds Pro Story We originally envisioned OmniFunds Pro being developed in three phases. In Phase One we integrated OmniFunds Pro into VisualTrader. This allowed us to quickly begin developing and testing OmniFunds.
The OmniFunds Pro Platform The Second Phase of OmniFunds was originally going to be a new desktop platform. However, we decided to cut to the chase! We skipped directly to Phase Three, a complete online platform, and OmniFunds Pro was born.
The OmniFunds Lab The OmniFunds Lab is exclusive to OmniFunds Pro owners/subscribers. The Lab allows you to customize and create any aspect of an OmniFund. You can create any number of custom OmniFunds, and soon you will also be able to turn on your OmniFund for fully automated portfolio management.
Creating an OmniFund Let s explore the Lab from a top down perspective. In order to create an OmniFund, you need to pair two different Portfolios together. These can be Portfolios provided, or Portfolios that you have created.
Creating a Portfolio The Portfolios Page allows you to customize an existing Portfolio, or you can create your own custom Portfolio. Portfolios can contain any commonly traded ETF or stock on a major US exchange. Portfolios are re-adjusted on an interval. You need to categorize your Portfolio based on investment type (Aggressive or Conservative).
Fixed Allocation There are two different allocation methods that you can use for your Portfolio. Fixed Allocation is the most similar to MPT, as it allocates a fixed amount to each Sector in your Portfolio. You can choose to have your Portfolio fully invested, so the percent allocation is always adjusted to maintain 100% allocation.
The Problem with Fixed Allocation Fixed Allocation Models, similar to MPT, create diversity based on different sectors or industry groups, and allocate based on user risk. However, there is no guarantee that different sectors or groups are diversified. This example shows three seemingly non-correlated sectors trading very similarly. In order to insure diversification, we want to know exactly how our current holdings are trading relative to each other RIGHT NOW.
APT Correlation Allocation We created APT (Advanced Portfolio Theory) in order to assure two things: We want the ability to diversify as much as possible across our current holdings based on their recent correlation. We want to rank our current holdings so that the securities with the highest probability of achieving gains get the highest correlation. This approach provides us with true diversity while positioning ourselves with the greatest chance of outperforming the market.
How APT Correlation Works STEP ONE: We measure the correlation of each security in a portfolio to a baseline symbol (e.g. SPY, $DJI, AAPL). STEP TWO: The correlation coefficients are then scaled and the securities are binned. STEP THREE: The securities are then ranked based on a measurement and the bins are then ranked based on average score of the securities in the bin. STEP FOUR: The bin with the highest rank gets the highest allocation, the second highest ranked bin gets the second highest allocation, and so on. Measure Correlation of Each Security Securities are Binned Securities/Bins are Ranked Bins Receive Allocation Values
Using APT Correlation Most of the APT Correlation calculation is performed in the background. Simply define the following three parameters: Ranking Function Benchmark Symbol Correlation Periods Selecting this calculation method will override your settings for Fixed Allocation.
Creating Sectors Every Portfolio can have any number of Sectors. Sectors allow you to define how the securities in that Sector are selected and the maximum amount of positions from that Sector that you will have at any one time. You can also have Sectors assigned to a Market State. If you leave Market States blank, that Sector will always be considered in your Portfolio.
OmniFunds Library OmniFunds Pro includes a Library of functions that make it easy for you to create OmniFunds. We provide a list of functions in the Library that we have found useful in OmniFunds. You can also edit these, or add your own functions to create a completely customized OmniFunds Pro Library.
Experimenting with Settings The Experiments Page allows us to try different settings to determine the robustness of our Portfolio, and to find the best settings. You load an existing Portfolio into Experiments. This allows you to iterate on different settings. The Backtest Range allows you to only test over a defined date range. This can be used to preserve blind data for validation. It can also be used to define settings for a certain Market State.
Putting it All Together OmniFunds Professional gives you complete control of how to configure a number of OmniFunds. Custom Symbol List Custom Library Custom Sectors Custom Portfolios Custom OmniFunds Experiments Access
The Nirvana Club Advantage Various functions in OmniFunds Pro can be performed using the AI tools available to Nirvana Club members: Security Selection Security Filtering Correlation Ranking Market State Determination ONLY Nirvana Club members will have access to OmniFunds using AI.
Getting Pro Access OmniFunds Professional will currently only be available to users who purchase the pre-sell offer. The pre-sell offer will also exclude buyers from having to pay AUM fees in the future. OmniFunds will charge 2% of AUM, or 20% of Trading Gains and 0.5% AUM for non-pro owners. OmniFunds Pro Special Offer Regular Price..$2495 Special Pre-Sell Offer..$1495 www.omnitrader.com/omnifunds