We have just completed one of the most challenging months in Novus Black’s history. Despite unfavourable market conditions and many variables going against us, we kept composed, acted with justification and made decisions responsibly and swiftly. As a result, we have retained our flawless track record of no losing months and delivered a 1.1% profit to the fund.
Unfortunately, February’s low profit means we cannot pay any investor returns and can only cover the fund’s running costs.
On the rare occasions when the market holds too much risk to trade responsibly, this can happen, and we all have to accept that minor or zero profit months can occur.
Although Novus Black aims to deliver excellent returns to its clients every month, we will only do so in the right circumstances and not risk capital or our brand reputation. Novus Black is here to provide sustainable profits and protect clients’ interests as much as possible; this does not include taking reckless risks in order to enhance our track record.
February Trading Summary
by Paul Chalmers (Head Of Trading UK)
As most of you know, February started with unfavourable circumstances, as the video that Steve and I circulated from Dubai earlier in the month explained.
February has been about stabilisation and a clean transfer from Texas to Novus Black Wales. However, we have overcome all obstacles and are now striding into the future with a stronger foundation and a more robust structure.
The February market had a tumultuous start, with major news from the US, Europe and the UK providing negative volatility. This news was significant enough for us to decide not to partake in the market madness, not risk anything and focus on the migration and setting the foundations for a positive start to March.
February proceeded with a different pattern than usual, with significant moves taking place in the Asian session and going flat in the main trading sessions during the day, where we would typically make our profit. This abnormal activity would have made trading risky, so we were happy with our decision as we saw many other funds take losses which we were not prepared to do.
Late in the month, the US markets finally gave up their bullish trend, and after a period of consolidation, we could plan for the inevitable retracement. This meant we could start closing past negative trades as part of the transition and add some profits to the fund. As of writing this, we have achieved all the main goals, and the fund is now meeting all requirements and risk protocols and is back in profit.
The good news is the markets are returning to regular movements, and we look forward to a much more buoyant and profitable month for March.
Market Outlook
by Paul Chalmers (Head Of Trading UK)
February has been very different than the forecast predicted; we went from hearing massive news announcements, which created negative volatility, to a millpond effect that followed during the UK and US sessions, making trading very difficult.
March is already set up to be a far more normal month as the effects of the dollar and US indices see a retracement from the frantic month of February.
The US indices are already retracing from the significant upward trend that happened in January and most of February; they are probably targeting the Fibonacci 50% level before we get a period of consolidation.
With the Fed stance, we expect the US dollar to dominate markets in March. Interest rates are still being looked at heavily to control the significant countries’ inflationary situations. A further rate hike will likely be considered in the coming months, but the current rise is now starting to have the effect needed, which is being monitored closely by the Fed, The Bank of England and The European Central Bank.
In summary, February’s negativity should not pass to March. Instead, we should see normality return to the markets and opportunities to make profits again should arise.
Improved ROI Structure
by Steve Hill (CEO)
As you all know, currently, the fund has to make 3% trading profit to allow Novus Black to pay any level of investor return.
Let’s take this month as a real example. Although we actually ended up with a positive profit balance, it was too low to allow us to pay any investor return (under 3%). We are looking to change this quickly in favour of a profit-share model where the probability of investor returns is considerably higher.
The new profit share model is based on a 70/30 split, meaning all investors will receive 30% net of the profit we make on their capital. The remaining 70% will go to Novus Black, where we will pay for all other expenses: office running costs (rent, service charges etc), regulatory license fee , compliance service provider, trading operations, staff wages and all other expenditures associated with running the Novus Black Fund.
This new model has many upsides to it and no foreseeable downsides, including:
1 – Profit Is Uncapped.
Unlike the old model, investors now benefit from higher-performing months as ROI directly relates to trading profit without being capped at a certain percentage. Simply put, investors can make higher returns.
2 – More Chance of Profit
Because investors will receive a direct 30% share of profits, there will no longer be a 3% minimum before returns can be paid to investors.
This means investors get paid their share on any profits Novus Black makes. If we consider this month’s profit (1.1%), investors would still have been paid a return.
3 – Sustainable
We acknowledge that we have made a few changes to the ROI model during the early development stages of Novus Black Fund UK Ltd. However, we would like to streamline the offering and provide all investors with a single structure that we are confident we can support throughout the life of Novus Black without any further changes being required.
4 – Profitable
Our track record shows we have generated an average of 8% per month which means, based on the new model (30% profit share), the investor would receive an average of around 2.5%-3% profit. In contrast, the higher months in our track record of approximately 15% would generate a 4.5% monthly return, far above any current schemes.
A video and Information Memorandum update will be circulated before any changes are made in the next few weeks.
Please note this is not a mandatory change. Novus Black will still honour the existing plans you are all part of. This new plan is optional, and no clients will be forced to move. However, the new plan means a much higher probability of monthly payments and guarantees that as long as Novus Black makes any profits, returns will be paid out to investors every single month.
The Novus Black Family Expands
by Steve Hill (CEO)
I am sure you will join me in sending your best wishes to our Technical Director, George Challiss, whose new baby boy, Teddy, came into the world this month on Valentine’s day at 10.5lb. We plan to teach Teddy how to trade from a very early age.
Dubai Is Live
by Steve Hill (CEO)
As you will know, I have spent much time developing and cementing relationships with large brokers and financial institutions in Dubai.
I am delighted to report that all of the travelling, time, and effort has been worth it, as from March 1st, we will be trading on behalf of Multibank (UAE).
We will record this as a new broker on FX Blue. Initially, the account will have a low AUM but will grow considerably over the next six months.
Novus Black plans to launch a Dubai-based fund which, although embryonic at this stage, is an integral part of our plans for the near future. We will inform everybody as we progress with this expansion and provide participation details.
Humanitarian Aid Fund (HAFGB)
by Cliff Barry (Founder of HAFGB)
Over the last year, HAFGB has raised over £750,000 in cash and goods for the Ukrainian people, and as a member of Novus Black, I wanted to ask for the support of my fellow members.
Every trip to Ukraine costs around £150 per pallet. We have also shipped over 350 generators to Ukraine to help people have the basic needs for heat and cooking. Recently we helped to raise over £5,000 to aid the people in Turkey and Syria.
There is a constant need for us to purchase the correct goods for the people in disaster areas and also to fund the ability to deliver to them. We do not have any administrative costs as a charity, and all our people are volunteers providing their time freely. We are a registered charity reference 1199500.
For the longer term, we plan to raise enough funding to help a Ukrainian community grow out of the impact of the conflict with new housing, education and infrastructure support. This will provide a blueprint to generate employment in a country where unemployment is generally 40%.
We are wholly committed to the needs of the people and seek donors to help us to help them.
Thank you to Novus Black, and it’s members for their continued support.
Should you have any questions regarding any of the points in this update, please feel free to email us at info@novusblack.co.uk, or phone us on 020 8187 8287.
We would like to sincerely thank you for your ongoing support with Novus Black and look forward to a prosperous future.
