Apex Token Fund claims to be the world’s first cryptocurrency-based “funds of funds” (FOF) investment vehicle. Find out what that means today in our review.
What is Apex Token Fund?
There are so many funds in the investment community today. Sometimes, investors wish they could invest in multiple funds simultaneously. Hence the creation of a “fund of funds”, or an FOF, as an investment vehicle.
Apex Token Fund describes itself as “the world’s first crypto-focused, tokenized Fund-of-Funds (FOF) investment vehicle.”
The fund gives investors access to a diversified portfolio of top investment strategies implemented by today’s leading crypto hedge funds. By diversifying your investments across multiple funds, you can mitigate risk while maximizing returns.
With Apex Token Fund, you’re not just diversifying risk by investing in multiple cryptocurrencies; you’re diversifying risk by investing in multiple cryptocurrency investment strategies. Some strategies based on sentiment. Others trade based on technical analysis. Some just track the market. You can invest in this “fund of funds” by buying a single APEX token, which represents a share of the fund.
How Does Apex Token Fund Work?
The creators of the FOF tokenized the fund for liquidity purposes. By tokenizing their FOF, investments can be liquid on day 1, whereas a typical hedge fund requires a multi-year lockup period.
The tokenization of the fund also democratizes access to it. Today, some leading hedge funds require minimum investments of $10 million or more. Apex Token Fund, meanwhile, requires the purchase of just a single APEX token.
The FOF portfolio will be liquidated on a date between 24 and 36 months after issuance, with capital gains proportionally distributed to APEX token holders.
Apex Token Fund Strategies
Specific fund strategies can be found in the Apex Token Fund whitepaper. The company lists a projected sample of strategies that includes all of the following:
- Buy/Hold (Concentrated): Large investments in a small number of high potential assets.
- Buy/Hold (Diverse): Investments in many assets diversified based on market cap and sector.
- Sentiment: Active trading on industry and sector news, trends, and industry relationships.
- Quantitative: Active trading using technical analysis on price movements and history.
- Arbitrage: Trading based on price discrepancies from inefficient markets.
- Token Sales: Early stage token sale investing in industry leading projects.
- Venture and Active: Deep technical analyses and active involvement in early stage projects.
Overall, Apex Token Fund’s primary objective, according to the whitepaper, is “to apply risk management principles by diversifying investments in an effort to reduce volatility.”
The purpose of this “blending” of strategies is to diversify risk based on different market conditions. Obviously, diversification is a great way to mitigate risk in traditional investments. However, diversification among tokens isn’t as effective, because outside factors can cause the entire industry to rise and fall (say, if an entire country bans cryptocurrency). To mitigate these risk factors, Apex Token Fund will invest in a variety of strategies that trade based on internal factors (like forks and alliances) and external factors (new regulation, enterprise adoption, etc.).
How Will Apex Keep the Fund Secure?
Obviously, Apex Token Fund isn’t the first company that seeks to create an Ethereum-based investment fund. Infamous projects like The DAO have sought similar goals – only for an enormous amount of funds to be stolen due to faulty smart contracts.
How will Apex Token Fund prevent this from happening?
Apex Token Fund claims that its token “is deliberately designed to be simple, reliable, and resistant to malicious actors.”
The company has partnered with Zeppelin Solutions, a blockchain security firm, to create the smart contract. Zeppelin has previously secured $450 million in token sales (including Brave, Augur, and Golem).
Private keys controlling the APEX token smart contract and the fund’s assets under management will be separated and kept in geographically distributed cold storage systems. These keys will be recovered only when a quorum of employees is present.
The Apex Token Fund Token Sale
The Apex Token Fund token sale for APEX tokens will begin with a pre-sale in January 2018, followed by a public crowdsale in February 2018.
Of the total supply of tokens 85% are being distributed to investors and 15% are being given to the core team and advisors.
The dates for that token sale have not yet been announced.
Who’s Behind Apex Token Fund?
Apex Token Fund’s team ha 25+ years of experience across finance, investing, and distributed technology. The team claims to have created a crypto hedge fund that outperformed bitcoin by 3,000% in 2017. They’ve also actively participated in open source blockchain development as well as enterprise blockchain application development.
Key members of the team include Chris Keshian, a Managing Partner at the blockchain asset hedge fund Neural Capital. There’s also Ari Nazir, another Managing Partner at the same hedge fund who has previously served on America’s National Economic Council at the White House.
Other key members of the Apex Token Fund team include Zain Allarakhia, Joseph Bradley, Matt Smith, and Scott Hoch.
The team is officially formed under the name Apex Token Inc.
Apex Token Conclusion
There are plenty of investment opportunities in the cryptocurrency space. There are so many opportunities that it’s hard to pick just a single fund or strategy in which to invest. That’s where Apex Token Fund sees an opportunity. Apex Token Fund will create a “fund of funds”, or FOF, investment vehicle. You can purchase APEX tokens that represent a share of that fund.
APEX tokens will launch through a crowdsale in January/February 2018. To learn more about the Apex Token Fund and its investment strategies, visit online today at ApexTokenFund.com.