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Alternative Market Briefing

For Potomac Portfolios, global managed futures and FX strategies become save haven

Friday, September 19, 2008

Potomac Portfolios LLC released recent performance yesterday, noting that in spite of the massive volatility triggered recently by the consecutive and unimaginable failures of Bear Sterns, Fannie May and Freddie Mac, Lehman Brothers, Merrill Lynch, and now AIG, that business was proceeding as usual at the Potomac Fund. “What’s all the fuss about,” said Thomas Lott, Potomac’s President. “Performance is mildly up this week; this is just a non-event here,” he said.

While market volatility surges to peaks not seen since July 2002, volatility at Potomac approached historic lows this week. “It’s all about massive diversification,” Lott said. The Potomac Fund, a FOF launched in July 2006 allocating exclusively to global managed futures and FX strategies, is diversified across a broad range of trading approaches, long and short, in virtually every sector and liquid instrument around the globe. “At the close of business yesterday,” said Lott, “Potomac was invested in a total of 85 instruments (52 to the long side and 33 to the short side) among currencies, commodities, fixed income and equities, for a total of thousands of tiny individual positions when parsed by all of their different characteristics…

Plus, the Potomac Fund does not employ credit in its strategy, so it is not credit-impaired, and instruments traded are plain vanilla managed futures and options…no swaps, CDO's and similar instruments,” said Lott. “With the portfolio this diversified, portfolio level vola......................

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