Returns on any investment platform come from how capital is deployed, how risk is managed, and how performance is measured over time. Modal Assets is structured to pursue returns through disciplined capital management and controlled exposure to opportunities, while recognising that returns are never guaranteed.
A. Core Principles Behind Return Generation
Modal Assets approaches return generation using four guiding principles:
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Capital Preservation First
We prioritise protecting invested capital through risk controls, allocation limits, and ongoing monitoring. Sustainable returns depend on avoiding large, avoidable losses. -
Risk-Adjusted Outcomes
Returns are evaluated in relation to the risk taken to achieve them. Higher risk can produce higher returns, but it can also produce larger losses. Our objective is to manage this balance responsibly. -
Structured Allocation
Capital is deployed based on internal allocation rules rather than impulsive or speculative decisions. Allocation may be adjusted as market conditions change. -
Continuous Review
Performance is not treated as “set and forget.” Positions, exposure, and strategy allocations may be reviewed and adjusted over time.
B. What “Returns” Represent
When we refer to “returns,” we mean performance results generated through investment activities, net of internal operational considerations (where applicable). Returns may be positive, neutral, or negative and can vary across time periods. Any performance figures, if referenced, must be understood as historical and not predictive.
C. Return Drivers
Returns generally come from one or more of the following drivers:
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Market Movement (Directional Exposure): Gains or losses from price movement in markets where capital is deployed.
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Relative Value Opportunities: Capturing pricing differences between instruments, timeframes, or market segments where suitable.
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Risk Premium Collection: Participation in opportunities where investors are compensated for taking measurable risk.
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Allocation & Timing: Decisions related to how much capital is deployed and when exposure is increased or reduced.
D. Capital Allocation Process
Modal Assets may allocate capital across different strategies or sub-allocations based on:
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Market conditions and volatility
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Liquidity and operational constraints
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Risk thresholds and exposure limits
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Performance monitoring and drawdown considerations
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Internal review outcomes and risk committee decisions (where applicable)
Allocation decisions are made to manage overall portfolio stability rather than chasing short-term gains.
E. Risk Management Embedded in Return Generation
Risk management is not separate from return generation—it is part of it. Examples of risk controls include:
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Position sizing limits to prevent excessive exposure
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Drawdown controls to reduce risk after losses
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Diversification across exposures where appropriate
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Liquidity considerations to avoid being locked into positions
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Review-based adjustments when risk conditions change
Even with controls, losses can occur and capital is at risk.
F. Why Returns Vary
Returns may vary due to:
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Market volatility, trend changes, and unexpected events
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Liquidity constraints and execution conditions
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Strategy performance cycles
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Risk reduction measures that prioritise preservation over growth
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External factors including regulatory or market infrastructure changes
G. No Guarantee Statement
Modal Assets does not guarantee profits, fixed returns, or capital preservation. Returns are dependent on market conditions and performance outcomes. Investors must evaluate risk tolerance and should only participate with funds they can afford to lose.