RISK DISCLOSURE

Futures and Options trading involves risk and is not for all investors.
Trading involves risk and should be pursued with risk capital only.
Risk of loss trading commodities can be substantial.
Past performance is NOT indicative of future results.

April 2006 -- CINV 2006529

1. What is APEX ACE Investments ?

APEX ACE Investments are program managed by professional money manager Yu-Dee Chang.  The main objectives of APEX are similar to the objectives of mutual funds -- to generate long-term capital growth and providing global portfolio diversification -- with the major difference being that instead of securities, a comprehensive strategy is utilized using S&P 500 index futures options or commodities options like Gold, , crude and currencies. A major reason to invest in a managed futures product, such as APEX, is to provide a non-correlated investment to a portfolio of traditional stock, bond and mutual fund investments that has the potential to improve returns and lower the portfolio’s volatility The use of options on futures gives us many advantages over equities and the ability to profit if the general market goes up, down or sideways.  Using strict money management rules, APEX is able to reduce the drawdown to a minimum.

    

Past performance is not indicative of future results.

2. APEX Past performance

APEX Past performance can be displayed using following links:


                APEX  ACE Full Disclosure Documents - DDOCS

         Past performance is not indicative of future results.

3. Low initial minimum investment of only $ 25,000 with DCP Asset Management systems

The ACE DCP systems are an investment program managed by professional money managers (ACE Investment Strategists, CTA).  The main objectives of APEX are similar to the objectives of mutual funds -- to generate long-term capital growth and providing global portfolio diversification -- with the major difference being that instead of securities, a comprehensive strategy is utilized using a diversified number of commodities options. A major reason to invest in a managed futures product, such as ACE DCP, is to provide a non-correlated investment to a portfolio of traditional stock, bond and mutual fund investments that has the potential to improve returns and lower the portfolio’s volatility The use of options on futures gives us many advantages over equities and the ability to profit if the general market goes up, down or sideways.  Using strict money management rules, ACE DCP is able to reduce the drawdown to a minimum. A

4. Not correlated with equities

The APEX system is based on selling option premium to gain profits.  This means that the market can go up, down or sideways and APEX can still make a profit while equities and Mutual Funds are only able to profit when the market goes up.  This shows that the APEX systems are not correlated to equities, making APEX a great diversification tool.

5. Does not care about market direction

Since the APEX systems take options positions a determined distance "out of the money" from the underlying market, the market can go up, down or sideways and still gain a profit.  It is much easier to predict where the market will not be (only one factor) than to attempt to predict when, where and how far the market will be (three factors).  We can still be wrong, so APEX will adjust the positions if the market moves too far in one direction in order to minimize the losses.

6. Steady growth potential

Since APEX only writes option positions that are near expiration, new positions are taken each month, reducing the exposure to large market moves.  The APEX systems are designed to minimize drawdown's by adjusting positions to minimize losses and still can be profitable in up, down or sideways markets, providing the potential for a steady growth.

7. Tax benefits: futures versus short term stocks

When preparing your taxes trading equities, you are required to list every trade you made during the year with the buy and sell prices and computation of profit/loss. Then you pay a maximum of 35% in taxes for short term gains (stocks held for less than a year).  When preparing your taxes trading futures, you only have a one line entry on your tax form with the total profit or loss after commissions and all other expenses. Futures are taxed as follows: 40% at the short term rate of 15% and 60% at the long term rate of 35% for an overall rate of 23% regardless of how long you hold the contract.  Therefore APEX system gives you the added advantage of paying 34% less taxes compared to short term stocks on your profits.

          TAX EXAMPLE:

                                     Equities:

• $100,000 In Equity Day Trading Profit

• 100% “Short Term”

• Maximum Tax Rate is 35%

• Federal Tax on Trading Report -- $35,000
  
  Futures:
   

• $100,000 Futures Profit

• 40% is “Short Term”

• At 35% Maximum Rate, Tax Due on Short Term Portions is $14,000

• 60% is “Long Term” With A Maximum Rate of 15% Tax Due is $9,000

• Total Tax of $23,000 à Which is >34% LESS Than Equities

8. Strict rules based system

The APEX system is traded based on a strict predetermined and pre-tested set of rules with over 25 parameters that took over five years to develop and are verified by two trader-strategists before each trade.  Since we are also trading our personal funds with APEX, we are confident that the positions taken have a high percentage chance of making a profit.

9. Designed for minimum drawdown

The APEX systems have been designed to minimize drawdown’s.  This was obtained by using strict money management principals.  Past performance is not indicative of future results

10. Properly managed Futures are not riskier than equities

Futures trading may not be for everyone.  Futures are only perceived riskier than equities because of the tremendous leverage available in the futures markets. Futures that are professionally managed are not riskier than equities.  The professional management (provided by the APEX systems) adds strict money management principals and removes the emotion from the trading decisions which are the two largest causes of failure with non- professional traders.

11. Most traders lose money

It has been reported that as many as 9 out of 10 non-professional traders lose money.  Since APEX is managed and traded by professional traders, you can overcome this impediment and join the ranks of the 10%.

12. Complies with Modern Portfolio Theory

Modern Portfolio Theory says that you should have your investments diversified across different asset classes to maximize returns.  The APEX systems are in a completely different asset class from stocks, mutual funds, bonds or real estate.  Dr. John Lintner, of Harvard University, in a 1983 study, “The Potential Role of Managed Futures Accounts in Portfolios of Stocks and Bonds,” has shown that a portfolio with 18% Managed Futures has a lower Standard Deviation and higher Rate of Return than a portfolio of just Stocks and Bonds.  The APEX systems provides a way to obtain that goal.For more information click here.

13. Excellent diversification tool

Since the APEX systems can make a profit under any market conditions it can add profits during a sideways market and offset losses during a down market.  This diversification follows Modern Portfolio Theory and can improve your overall returns. Using APEX Premium and APEX Asset systems combined is an excellent diversification tool, and  is highly recommended.

14. Who regulates Commodity Trading Advisors (CTA)?

ACE is regulated by the Federal Commodity Futures Trading Commission (CFTC) and by the National Futures Association (NFA), the congressionally authorized self-regulatory organization of the futures industry.  ACE disclosure documents have been submitted and approved by the NFA.

15. If you don't make money, we don't make money

Incentive fees for the APEX systems are collected only on new profits.  When a drawdown does occur, no incentive fee is collected until the loss is made up and then the incentive fee is applied only to the new profits.

16. Closely monitored and managed by Yu-Dee Chang and professional traders

Yu-Dee Change is personally involved with every trade it's traders are making.

17. Individual, Joint, Corporate, Partnerships, Trusts and IRA account types accepted

All types of accounts can be traded using the APEX system.  APEX provides an excellent way to diversify an IRA account.

18. Accessibility of Investment Funds

Your APEX funds are kept in a secured segregated account and you can log-on every day using a secured sign-on to see your current positions and balance in an easy to understand format.  Funds not committed by margin can be withdrawn at any time with just an e-mail notification.  Funds committed by margin can be withdrawn within 5 days (requires the flattening of positions). 

19. Selling premium

Futures trading may not be for everyone.  It is estimated that somewhere between 70% to 90% of all options that are held to expiration expire worthless.  That is because it is very difficult to predict the market direction, magnitude and timing well enough to make money buying options.  The APEX system writes (sells) the options to collect the premium.  We then hold the option until expiration (unless the market moves enough to give us a signal to make an adjustment based on a number of variables, for instance volatility and time to expiration are the major ones) and let them expire worthless..

20. Built-in Diversification with ACE DCP

The ACE DCP Asset Management system is based on using a strategy of writing a combination of  out-of-the-money naked options using from 3 to 10 different commodities like gold, crude, euro and yen currencies, sugar, etc. This built-in Diversification smooth out the steady growth, and minimized drawdawns.

21. Short term trades with controlled risk

The APEX systems write options positions that are a measured distance "out of the money" and that are near expiration.  This maximizes the profit obtained from time decay and contributes to a high percentage of profitable months.

APRIL2006 -- CINV 2006529