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July 2017
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
RiskDisclosureTHE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHERSUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTENOBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TOLARGE LOSSES ASWELL AS GAINS.
IN SOME CASES, MANAGED COMMODITY ACCOUNTS ARE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT ANDADVISORY FEES. IT MAY BE NECESSARY FOR THOSE ACCOUNTS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIALTRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THE DISCLOSURE DOCUMENT CONTAINS ACOMPLETE DESCRIPTION OF THE PRINCIPAL RISK FACTORS AND EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THECOMMODITY TRADING ADVISOR ("CTA").
THE REGULATIONS OF THE COMMODITY FUTURES TRADING COMMISSION ("CFTC") REQUIRE THAT PROSPECTIVE CUSTOMERS OFA CTA RECEIVE A DISCLOSURE DOCUMENT WHEN THEY ARE SOLICITED TO ENTER INTO AN AGREEMENTWHEREBY THE CTA WILLDIRECT OR GUIDE THE CLIENT'S COMMODITY INTEREST TRADING AND THAT CERTAIN RISK FACTORS BE HIGHLIGHTED. THIS BRIEFSTATEMENT CANNOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT ASPECTS OF THE COMMODITY MARKETS.THEREFORE, YOU SHOULD PROCEED DIRECTLY TO THE DISCLOSURE DOCUMENT AND STUDY IT CAREFULLY TO DETERMINEWHETHER SUCH TRADING IS APPROPRIATE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. YOU MAY ALSO REQUESTDELIVERY OF A HARD COPY OF THE DISCLOSURE DOCUMENT, WHICH WILL ALSO BE PROVIDED TO YOU AT NO ADDITIONAL COST.THE CFTC HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN ANY OF THESE TRADING PROGRAMS NOR ON THEADEQUACY OR ACCURACYOF ANY OF THESE DISCLOSURE DOCUMENTS.
OTHER DISCLOSURE STATEMENTS ARE REQUIRED TO BE PROVIDED YOU BEFORE A COMMODITY ACCOUNTMAY BE OPENED FORYOU. ADDITIONAL DISCLOSURE REQUIRED FOR ADMINISTRATIVE FEES. A COMPLETE DISCUSSION OF FEES AND CHARGES AREREPORTED IN THE CTA's DISCLOSURE DOCUMENT.
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
§ PacificFrontCapital, LLCisaregistered Commodity TradingAdvisor(“CTA”) and
member oftheNational FuturesAssociation (“NFA”).PacificFrontmanages
accounts forInvestors,buyingandselling contracts inavarietyoffuturesmarkets
usingproprietary investment strategies. Managed Futures isanalternative
investment thatprovidesalowcorrelation tothetraditional asset class ofstocks
andbonds .
§ PacificFrontCapital's tradingprogramwascreated totargetsuperiorannual
returnsforinvestorswithappropriate risk-returnmetrics. Itserves asan
alternative investment vehiclewith little tonocorrelation tomajormarkets and
otherCTAs.
§ Theprogramutilizes proprietarymodels togenerate tradeideas based onthe
agreement ofpriceaction,patterndata,specific technical indicators, and
fundamentals. Themodels aregearedtodirect themanager’sattention toa
particularmarket,butexecution isultimately based ondiscretion.
PacificFrontTradingProgram
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
BenefitsofManagedFutures
ReducedVolatility
Theopportunity toreducethevolatilityriskofaportfolio.
GlobalDiversification
Theopportunity toparticipate inglobalmarkets.
EnhancedReturn
Theopportunity toenhance aportfoliosreturns.
ProfitPotential
Theopportunity toprofitinbothrisingandfallingmarkets.
ReducedVolatility
EnhancedReturns
GlobalDiversification
ProfitPotential
Awellbalancedmanaged futures portfoliocanprovideadiversified global investmentopportunity forinvestors. Themainbenefits include:
Theadditionofmanagedfuturestoaclient'sportfoliodoesnotmeanthataportfoliowillbeprofitableorthat itwillnot experiencesubstantiallossesandthatthestudiesconductedinthepastmaynotbeindicativeofcurrenttimeperiodsoroftheperformanceofanyindividualCTA.
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
MichaelAbdulSalam
Michael istheFounderandCEOofPacificFrontCapital. Bornandraised inNewport Beach,CA,Michael hasbeen developing hisstrategyforoversixyears.Hecamefromafuturesindustryfamily,wherehewasmentored byhisfather,whowasasuccessful traderovermultipledecades, andhismotherwhoranherownbrokeragefirm.
Michael attendedUniversity ofCalifornia, Irvinewherehereceived aBAinBusiness EconomicsandwaspartoftheCampuswide HonorsProgram.Whileattending school,MichaelworkedatRothCapital Partners,afull-serviceinvestment bank.
ChiefExecutiveOfficer
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
EstherGoodman
EstheristheCOOofPacificFrontCapitalandisresponsibleformanagingalloperationalaspectsofthefirm.
Formostofher30+yearcareerinthealternativeinvestment/futuresindustry,EstherwasSeniorExecutiveVicePresidentandGlobalChiefOperatingOfficerofTheKenmar Group,afundoffundswithpeakassetsof$4.5billionand55employees.AtKenmar,Estherwasresponsibleformanagingthefronttobackofficeoperationsofthefirm,includingmarketingandclientservices,legal,compliance,operationsandadministration,financeandIT.ShewasamemberofKenmar’s InvestmentCommitteeandservedasChairmanoftheOperationalRiskCommittee.
Ms.GoodmanwasaFoundingMemberandDirectoroftheManagedFuturesTradeAssociation,theindustry’sfirsttradeassociationandin2014shereceivedtheLifetimeAchievementAwardfromCTAExpo.Shehasspokenatnumerousinvestmentseminarsandconferences.
EstherreceivedherBAinChildPsychologyfromStanfordUniversity.
ChiefOperatingOfficer
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
ProgramOverview
GeneralInformation
Long/Short- Nodirectionalbias
85%Technical/15%Fundamental
Diversificationovernumeroushighvolumeliquidmarkets.
Executestradesondiscretionaccompaniedbyproprietarymodels.
Proprietarymodels havebeen builtonyearsofexperiencethroughnumerousmarketconditions.
Programisuncorrelatedtomajormarketsandothermoneymanagers.• CorrelationtoS&P 500:-0.03
TradingStyle
PositionTrading:• LowFrequency,nodaytrades• 1– 5trades permonth• 20–50tradesperyear
TypicalTradeLength:• Winningtrades: 1to8weeks• Losingtrades:0to2weeks
Returnto Risk:A5:1ReturntoRiskRatioisrequiredtoinitiatetrade
Programmayremainin100%cashforextendedperiodsoftime
Typically,positionsstartwith25-50%ofintendedfinalpositionsize.Contractsareaddedaccordingly.
InvestmentInformation
AccountStructure: SeparatelyManagedAccounts
Investors: RetailClients,High-Net WorthInvestors,FamilyOffices,Institutions
ManagementFee: 1%
PerformanceFee: 25%
Start Date: April2016
MinimumInvestment: $100,000
TradingFrequency: ≈1500RTs/Million/Year
Capacity: $500,000,000
HighWaterMark: Yes
NotionalFunding: Yes
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
PortfolioExposure
Commodities50%
Currencies20%
InterestRates20%
StockIndices10%
MajorCommodities§ CrudeOil,Gold,Copper,Soybeans,
Wheat,SoybeanOil,Corn,Sugar,Cocoa
Currencies§ EUR,YEN,AUD,CAD
Interest Rates§ 30YearBonds,10YearNotes
StockIndices§ S&P500Index
GeneralMarketConcentration
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year
2016 11.61 38.76 -9.58 16.36 3.93 9.05 9.19 0.58 12.64 128.44%
2017 -0.65 -7.92 2.48 -1.28 7.82 -2.13 -6.74 -8.93%
*InformationCompiledbyComplianceSupervisorsInternationalInc.Formattedforbestvisualeffect.FullPDFavailableonrequest.(1)TheWorstPeak-to-Valleyistheworstdrawdown%lossovertheindicatedperiodoftime,(2)theSharpeRatioiscalculatedbasedona0%RiskFreeRateofReturn,and(3)theSortinoRatioiscalculatedusinga0%MinimumAcceptableROR
TradingAdvisor: PacificFrontCapital,LLC
TradingProgram: PFCFuturesTradingProgram
InceptionofTradingfortheAdvisor: 4/1/2016
FundsbegantradinginProgram: 4/1/2016
TotalNominalAssetsunderAdvisor'sManagement: $18,065,631
TotalNominalAssetsinthisCapsule: $18,065,631
WorstMonthlyDrawdown: (9.58%)- Jun-16
WorstPeaktoValleyDrawdown(1): (9.58%)
DrawdownDates May2016– June2016
FrominitialclienttradingperiodbeginningApril2016**
ClientPerformanceCapsule*
Return/RiskSummary
Avg.MargintoEquity: 10-15%
Avg.EquityRiskperTrade: 2%
SharpeRatio(2): 1.6
SortinoRatio(3): 4.5
CalmarRatio: 7.6
AverageMonthlyGain: 11.24%
AverageMonthlyLoss: -4.72%
TotalReturn: 108.04%
**TheperformancepresentedinthefollowingcapsulefromApril2016toSeptember2016representsthetradingresultsfortwoaccountstradedpursuanttopowerofattorneyprovidedtotheAdvisor'ssoletradingprincipalMichaelSalam.ThefirstaccountbegantradinginApril2016andthesecondaccountbegantradinginJune2016.MichaelSalamoperatedpursuanttoanexemptionprovidedforinCommodityExchangeActsection4mwherebyhedidnotholdhimselfoutgenerallytothepublicasaCTA andhehadnotfurnishedcommoditytradingadvicetomorethan15personsduringthecourseofthelasttwelvemonths.ClientreturnsfromApril2016toSeptember2016arepro-formaata 1%managementfeeand25%performancefee.BeginningOctober2016,theAdvisor,beganmanagingclientaccountsandthetradingresultsarethecomposite'sactualperformance.
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
VAMI(ValueAddedMonthlyIndex)*
VAMI(Value ofinitial $1,000Investment)
PacificFrontclient returnshavesignificantly outperformedtheS&P500TRIndex fromApril2016toJune2017withacorrelation of-0.03
*VAMIisanindexthattracksthemonthlyperformanceofahypothetical$1,000investment.
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17
PacificFront S&P500TR
PASTPERFORMANCEISNOTNECESSARILYINDICATIVEOFFUTURERESULTS.FUTURESANDOPTIONSTRADINGINVOLVESUBSTANTIALRISKOFLOSSANDISNOT SUITABLEFORALLINVESTORS.
§ MichaelA.Salaminvestshisownfundsintothetradingprogram
§ Typically,everypositionthatisplacedinthePFCFuturesTradingProgram
isincludedintheprincipal’spersonalaccount
§ Generally,greaterleverageisusedintheprincipal’saccountcomparedto
clients
§ InadditiontothepositionstakeninthePFCFuturesTradingProgram,the
principalalsomakestradesonnewstrategiesthatareinthedevelopment
phaseandareconsideredtohavemorerisk
Principal’sParticipation
HRF542