An Investor’s Guide to Our Strategy: Eupatrid Global Trends

December 2019

Systematically Scanning the Globe for Trends and Deploying Capital in a Responsible Way

More Diversified Opportunities to Profit

Systematic Solution to Capture Major Moves

More Consistent Returns than Benchmarks

Protection During Extreme Volatility & Bear Markets

Please read the disclosures at the end of this paper.

Eupatrid Global Trends (EGT) is a systematic trend following strategy that seeks to profit from long-term trends in a wide array of markets - equities, bonds, commodities and currencies (including crypto).

It does not depend on or discriminate against any one asset class, market or stock to provide profits. It scans the globe for attractive risk-reward opportunities and allocates capital when trends materialize.

We believe EGT can offer investors:

What Does EGT Do?EGT attempts to locate and ride long-term trends in all asset classes. It specializes in systematically capitalizing on both up and down trends in multiple asset classes - equities, bonds, commodities and currencies (including crypto).

EGT monitors a diversified portfolio of liquid stocks and futures markets. It systematically monitors the price activity of each instrument. When it indicates a new trend forming, it positions with the trend.

In most cases, it holds onto positions as long as the trend remains in tact. If and when the trend stalls out and reverses, it gets out of the position as soon as possible. In special cases, such as sentiment reaching extremes or when the correlation of our portfolio holdings increase significantly, we’ll reduce exposure and even eliminate some positions despite their trend being in tact.

Exhibit 1: EGT in Action Apple Inc. (AAPL) September 2007 - November 2019

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Illustrations of trades include both hypothetical (2007-16) and actual (2017-Present)

Notice how EGT never gets in at the bottom or out at the top. It waits for the trend to take shape before getting in or out.

We do not buy low and sell high, but in fact the exact opposite. We obey the law of momentum and believe that trends will continue to occur in the future.

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When Does EGT Make Money?

We generate positive returns when prices persist in one general direction, either up or down, for an extended period of time. We do not predict which markets will move and the direction they’ll move, but instead wait until a clear trend forms before taking a position. If the trend continues in our favor, we produce a profit. The only prediction we make is that trends will continue occurring in the future.

On the following page is an example of a favorable market for EGT - Oil.

In the second half of 2014, Crude Oil began to break down. The trend started to pick up steam after a long period of consolidation where we held a long bias and incurred some losses after a couple of unsuccessful attempts going long.

The rallies fell and in Q4 2014, prices broke enough for us to initiate short positions. Well, prices kept falling for the next 15-16 months giving us a handsome profit.

Crude oil chart on next page.

Exhibit 2: A Favorable Market for EGT Crude Oil January 2013 - December 2016

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When Does EGT Lose Money?

Conversely, EGT performs poorly in choppy rangebound environments where trend has no clear direction, up or down, but instead moves sideways. In these environments, lots of false breakouts occur; rallies get sold and dips get bought. As a result, we wind up taking lots of small losses that deteriorate our capital. We continue cutting losses and keeping them as small as possible until the next round of trends come along.

Gold chart on next page.

Annotations are actual trades made by the Eupatrid Global Trends strategy.

Exhibit 3: An Unfavorable Market for EGT Gold January 2015 - December 2019

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Benefits of Investing in EGT

More Diversified Profit Opportunity

Many investors rely solely upon traditional assets for returns - stocks, bonds and real-estate. When these assets provide little opportunity, their portfolios struggle. We view this as a weakness, but an easily correctable one.

EGT attempts to create a stronger more balanced portfolio by diversifying further into commodities, currencies and crypto. These areas can provide meaningful returns over time, especially when traditional assets struggle.

Annotations are actual trades made by the Eupatrid Global Trends strategy.

A Systematic Solution to Capture Major Moves

Relying on feel and intuition are not long-term solutions to producing consistent performance. We believe a well-researched clearly defined process puts us in a much better position to achieve long-term success.

Market behavior dictates which markets and stocks to buy or sell and when to do so. EGT utilizes consistent rules in regards to which assets to track and when to get in and out.

EGT has no ego. It does not have preconceived notions on what it would like the markets to do. It does not root for one asset class over another. It does not care how it makes money. It simply adapts and goes with the trends.

More Consistent Returns than Benchmarks

We believe the odds of an investor making money with us improves as their holding period lengthens. In holding periods of at least two years, EGT has produced steadier and more reliable returns than its benchmarks.

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Holding Periods

One of our goals is to produce profits in at least 90% of all five year holding periods. Currently, we’re around 75%. In the past few years, we believe we’ve taken steps to improve our odds of delivering more consistent long-term profits.

Protection During Extreme Volatility & Bear Markets

EGT has a history of outperformance when traditional asset classes and hedge funds struggle. When volatility spikes and markets reverse course, our adaptive stance (more specifically our portfolio construction and risk management techniques) help protect capital better than other investment options.

In extreme cases, EGT has even displayed an ability to produce profits (seen below).

Exhibit 3: Performance During the Worst 10 Quarters for the S&P 500 EGT versus Benchmarks January 2011- September 2019

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Performance in legend denotes the average performance during the time periods listed.

EGT in a Portfolio

The systematic global macro investing approach has a long history of success - producing attractive absolute and risk-adjusted returns while serving as a safe haven during equity bear markets.

Investors have been slow to integrate strategies like EGT into their long-only equity and bond portfolios. Viewing EGT only as a bear market has been a repeated mistake and tends to lead reinforce short-term performance chasing.

Strategies like EGT are counter-cultural. They don’t abide by the “buy low, sell high” mantra. They don’t look for bargains. They buy strength and sell weakness; never getting in at the bottom, out at the top or predicting when the trends will turn.

EGT can improve any investor’s desire to earn a more stable return over time via thorough diversification, systematically locating and riding trends, and rigorously cutting losses as quickly as possible.

We believe EGT will continue producing solid gains over the long run because of two main reasons:

1) Investors continuing to succumb to major behavioral biases (e.g. Disposition Effect, Herding, Hindsight Bias, etc)

2) Our reliance on a systematic process (not feel or intuition), which eliminates the risk of our emotions interfering with investing decisions

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About Melissinos Trading

Melissinos Trading is an investment firm designed to produce attractive absolute and risk-adjusted returns by capitalizing on trends in stocks, bonds, currencies, crypto and commodities. The firm was founded in 2011.

We invest in a variety of asset classes using trend following techniques while also maintaining robust risk controls. This allows us to be nimble, to take advantage of opportunities all across the globe and to cut our losses before they inflict too much damage to our portfolio. The firm’s portfolio is managed by Michael Melissinos.

Today, we manage funds for high net worth individuals, entrepreneurs, local business owners and family offices.

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Melissinos Trading | 20 E New York Ave | Beach Haven, NJ 08008 | (732) 688-2683

www.melissinostrading.com

Disclosures

FUTURES TRADING INVOLVES A SUBSTANTIAL RISK OF LOSS PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS

Between November-December 2011, Melissinos Trading transitioned to a commodity pool structure. As a result, no trades or fees were taken. ᴱRepresents estimated not actual performance. Sharpe and Sortino Ratio uses a 0% risk free rate. MAR Ratio = CAGR / Max 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.

This document contains certain forward looking statements and projections. Such statements and projections are subject to a number of assumptions, risks and uncertainties which may cause actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by these forward-looking statements and projections. Prospective investors are cautioned not to invest based on these forward-looking statements and projections. Certain information contained herein has been supplied to the Advisor by third parties. While the Advisor believes such sources are reliable, it cannot guarantee the accuracy of any such information and does not represent that such information is accurate or complete. An investment with the Advisor is speculative, involves a high degree of risk and is intended only for sophisticated investors who are able to bear the loss or more of their entire investment.

THIS MATERIAL IS FOR INFORMATIONAL PURPOSES ONLY. FUTURES TRADING IS SPECULATIVE AND INVOLVES A HIGH DEGREE OF RISK. PLEASE REVIEW MELISSINOS TRADING'S CURRENT DISCLOSURE DOCUMENT FOR A COMPLETE DESCRIPTION OF THE EUPATRID COMMODITY PROGRAM AND IT’S ASSOCIATED RISK.

This presentation has been furnished on a confidential basis solely for the information of the person to whom it has been delivered. It is for qualified eligible persons only, pursuant to CFTC Regulation 4.7. It is for internal use only, and each such person, by accepting delivery of the presentation, agrees not to reproduce or re-circulate it, nor to divulge its contents to any person other than a legal, business, investment, or tax advisor. This presentation does not constitute an offer to sell or purchase any securities or futures related products or services. Such an offer could only be made to qualified individuals or entities via the appropriate offering and disclosure documents. Index performance in this presentation was sourced from third party sources deemed to be accurate, but is not guaranteed. Past performance is not indicative of future results. All index performance is gross of fees and would be lower if presented net of fees. The risk of trading futures is substantial. There is a substantial risk of loss associated with trading futures and is not suitable for everyone. Managed futures can help enhance returns and reduce risk, but they can also result in further losses in a portfolio. Market analysis, returns, estimates and similar information, including all statements of opinion and/or belief contained herein, are subject to a number of assumptions and inherent uncertainties. There can be no assurance that targets, projections or estimates of future performance will be realized.