Mexem is turning out to be the great disruptor in the local online broking space.
Its latest innovation is Signals Bank, which provides automated trading strategies that have been live tested over a period of at least two years.
Those who sign up before December 2020 will get the signals free for three months. Thereafter, Signals Bank will cost between $10 and $50 a month, depending on the complexity of the strategy. Those who sign on can unsubscribe at any time.
“Some of these strategies have produced outstanding and stable gains through some of the choppiest markets we’ve seen in years,” says Ryan Gordon, CEO of Mexem Africa. “There’s a variety of different strategies for different risk appetites covering different asset classes, from bonds to equities, CFDs, forex and options.”
Some eye-watering returns
Some of the strategies have produced eye-watering returns. For example, an Options Only Strategy is up 24% for the year so far. A Long/Short Strategy is up 15% for the year to date.
This means investors can trade like a hedge fund but without the hassle and the high costs, says Gordon. Those who want to sign up for Signals Bank will have to open a Mexem account, which takes less than an hour once the Know Your Customer documents are uploaded. They can then fund their account using rands, or move money offshore using their R1 million forex discretionary allowance. Either way, they then have access to 120 markets around the world.
Gordon says Signals Bank will provide a revenue stream for algorithm developers and traders with a verifiable record of trading success lasting at least two years. Gordon adds that there are plenty of talented algorithmic and quantitative traders who would like to put their strategy to the test on external funds.
Signals Bank subscribers will have full transparency into the past performance and risk metrics of the different strategies.
They will also be able to see any open positions in real-time.
Some of the strategies are highly complex, involving multiple asset classes and strategies, covering equities, fixed income, currencies and options across different regions of the world. Some are designed for more conservative investors who want to preserve capital in US dollar terms and beat inflation. Others, such as some of the options strategies, are far more aggressive and aim to beat the passive index funds.
Signals Bank subscribers can choose a fully automated trading strategy, where trades are executed on their behalf, or they can manually execute the trades once the signals are pushed to their smartphone or email.
Access to world-leading strategies
Gordon says Signals Bank gives investors access to world-leading strategies that use the most sophisticated data mining, artificial intelligence and machine learning techniques to develop a comprehensive and return-focused algorithm that spits out the most profitable trades given the fundamental and technical landscape of the market conditions.
One of the signals providers is Rimar Capital, Mexem’s sister company, which offers seven different strategies. The following results, published at the end of August 2020, are for the year to date.
- Rimar Fund A is up 9.53%
- Rimar’s Long Strategy is up 9.32%
- Rimar’s Options Strategy is up 62%
- Rimar’s Blended Strategy is up 9.11%
Launched in 2016 as an introducing broker to Interactive Brokers, the largest electronic broker in the US, Mexem offered South Africans low-cost access to more than 120 markets around the world. Which means you can own shares like Apple, Microsoft and Amazon in your own name without having to funnel your funds through a unit trust.
Mexem charges US$0.50c a share with a minimum charge of $1 per trade (regardless of the number of shares being purchased) and a maximum of 1% of the total purchase price. This is much lower than that charged by most brokers, who often impose a $20 minimum charge.
South African investors paying attention to overseas markets may feel aggrieved that they have missed out on buying shares such as Tesla, which is up more than 400% since the start of the lockdown, or Amazon, up 67% over the same period.
There is no question that investing overseas in a simple index fund that tracks the S&P 500 index would thrash the JSE Top 40 index over the last 10 years.
The S&P 500 index shot up three-fold over the last decade, while the JSE Top 40 index (in US dollars) struggled to gain just 20%.
But now investors could potentially beat the indices by selecting trading strategies that promise to do just that.
“A large percentage of Mexem clients are aged 25-40 and want to exercise greater control over their wealth management by cutting out middlemen and brokers who cream off fees, often for very ordinary returns.
“We see this as the future of investing. People want to assume greater control over their wealth management and investment approach, and Signals Bank is for them. We see a massive future for this.”
Brought to you by Mexem Africa.