PXG Arbitrage Fund
FUND OBJECTIVE
The Fund seeks to generate consistent returns through basis trading in cryptocurrency markets. By capitalizing on price differences between spot and futures markets, the Fund aims to deliver stable income while maintaining a disciplined risk management approach.
The expanding opportunities in cryptocurrency markets, driven by market volatility and innovation, further enhance the potential for structurally compelling trades.
INVESTMENT STRATEGY
The Fund leverages yield-generating basis trading strategies in crypto. This involves purchasing an asset in the spot market while simultaneously selling it in the futures market to lock in the spread (or “basis”).
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To optimize returns, the strategy integrates:
Market Neutral Approach
Maintains minimal correlation with broader crypto trends through hedged spot and futures positions, shielding the portfolio from directional price swings.
Dynamic Positioning
Adjusts exposure across various cryptocurrencies and exchanges based on real-time market conditions and liquidity metrics.
Active Monitoring and Automation
Combines constant oversight with algorithmic systems to identify and act on arbitrage opportunities rapidly.
Efficient Leverage
Employs disciplined leverage tactics, with strict risk controls, ensuring positions are appropriately sized to balance risk and potential return.
Liquidity Optimization
Ensures sufficient liquidity across major exchanges by prioritizing liquidity-rich markets and maintaining a mix of assets to facilitate efficient trades without slippage.
FEES: 2% management fee, 30% performance fee
MINIMUM INVESTMENT: 100,000 USD
BROKER: Interactive Brokers
CUSTODIAN: Interactive Brokers
DISTRIBUTION FREQUENCY: Quarterly after one-year lockup
RISK PROFILE: Moderate
WHY INVEST IN PXG CRYPTO FUND?
CONSISTENT
INCOME GENERATION
Basis trading captures predictable and recurring spreads between spot and futures markets, offering steady returns regardless of market direction.
UPSIDE POTENTIAL
The Fund capitalizes on adopting and expanding the digital asset class markets to enhance return opportunities.
MARKET NEUTRALITY
The strategy’s market-neutral design shields the portfolio from directional price swings, reducing overall volatility.
DIVERSIFIED
EXPOSURE
DISCIPLINES
RISK MANAGEMENT
By operating across multiple crypto exchanges and assets, the Fund maximizes arbitrage opportunities and minimizes counterparty risks.
The Fund employs a systematic approach to continuously monitor and mitigate risks, incorporating position sizing, margin management, automated risk alerts, and counterparty credit assessments.