Quantitative Investment Management, LLC

Global Program

PREDICTIVE MODELING Financial markets are not entirely efficient. Numerous small inefficiencies exist and can be exploited through the prudent use of robust analysis and predictive technologies. QIM currently employs over 1,000 quantitative trading models that utilize pattern recognition to predict short and medium-term price movements in global futures markets. In the search for those models, billions of others have been rejected. All models are tested across massive datasets that expose them to a gamut of market, economic, and political environments, as well as a wide range of timeframes and interactions. Only those models that prove to be the most robust, statistically significant, and conceptually diverse are used in actual trading. The resultant systems of models offer reliable signals that guide market timing and trade allocation. QIM's trading strategies and models may be revised from time to time as a result of ongoing research and development which seeks to devise new strategies and systems as well as to improve current methods. The strategies and systems used by QIM in the future may differ significantly from those presently used, due to the changes which may result from this research. Clients will not be informed of these changes as they may occur. RISK MANAGEMENT The enduring success of any trading program relies heavily on the risk management used in implementing the strategy. QIM applies highly sophisticated risk management procedures that take into account the price, size, volatility, liquidity, and inter-relationships of the contracts traded. Each account's positions are balanced in a manner that allocates approximately equal amounts of measured risk to as many distinct markets as possible. During significant drawdowns in equity, QIM reduces market exposure by scaling back the overall leverage. TRADING Ultimately, QIM's trading is approximately 90% systematic and 10% discretionary. All facets of the predictive models, risk management, and trade allocation are fully automated or proceduralized. In this sense, the trading is systematic. However, discretion plays a role in both the final trading decisions and allocations as well as the constant pursuit of improvements. In addition to the abundance of technologies driving the daily trading, QIM's staff evaluates every market in which it trades on a daily basis and monitors numerous other factors, including, but not limited to: volume and open interest, news, correlation pairings, cash prices, opening calls, slippage and volatility. The trading is discretionary in that final decisions are made, and systems occasionally overridden, based on the full set of information that has been compiled.