What caused the two large draw downs?
ANS: Since the concept was developed in 1986, there have been two large draw down situations. The first was in 1992 with a maximum loss of 14% and the recovery period was 4 months. This was caused by over concentration of positions in too few markets. The Fund has been far more diversified ever since. The second large loss occurred in April 2000 with a maximum loss of 26%. The loss was the result of fraud by the officials of an exchange. Management met unwarranted margin calls. Management has adjusted operational procedures so that no margin calls are ever met.
