The Capital Management's Aggressive Program

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Covenant Capital Management’s Aggressive Program is the same as their original program with the only twist that their positions are more leveraged. The aggressive program uses and executes the same trading signals as the Original Program; however, it will allocate a larger amount of risk at trade inception and will allow for risk in a given account to accumulate to a level approximately 20% higher than the maximum risk tolerated by the Original Program. This program has lower minimum account sizes. Participants in this program must be prepared for larger drawdowns and greater volatility than the Original Program. Annual drawdowns of greater than 20% from daily peaks to valleys are expected and should be incorporated into a client’s decision to invest in the Aggressive Program. Clients should only invest in this program if they have a minimum investment horizon of at least 3-5 years. CCM targets maximum drawdowns in the Aggressive Program of 30%. The strategy used by Covenant is best described as the idea that freely-traded financial markets exhibit profound inefficiencies and they want to take advantage of it. They are 100% trend following. What their research found, historically speaking is that this tendency called the leptokurtic distribution of price movements can give them an edge. The understand that the return curve is not normally distributed but that the pike of the return is actually higher and the shoulder narrower. The tails are also fatter giving them

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