Managed Trading Accounts Explained: A Swiss Institutional Approach

Managed trading accounts represent a specialized approach to active portfolio management where qualified investors maintain account ownership while delegating trading authority to professional managers. Understanding the institutional framework, regulatory structure, and operational characteristics enables informed decisions about this alternative to traditional pooled investment vehicles.

Structure and Legal Framework

Managed trading accounts operate under Limited Power of Attorney (LPOA) agreements that grant trading managers authority to execute transactions while the investor retains account ownership and custody of assets. This structure differs fundamentally from mutual funds or hedge funds where investors hold shares in a pooled vehicle.

In Switzerland, managed account arrangements are regulated under FINMA's asset management framework, with requirements for written mandates, regular reporting, and fiduciary duties. Swiss-domiciled managers benefit from the country's sophisticated regulatory environment and investor protection standards while maintaining operational flexibility to implement diverse trading strategies.

Trading Strategies and Implementation

Managed trading accounts accommodate various strategies including systematic trend following, mean reversion, spread trading, and discretionary approaches across equities, futures, options, and foreign exchange markets. Institutional managers employ proprietary algorithms, risk management systems, and execution infrastructure designed to deliver consistent risk-adjusted returns.

At Avertis Private Capital Management, our managed trading approach combines algorithmic signal generation with disciplined risk management and position sizing. We trade U.S. equities and index futures through Interactive Brokers accounts, providing clients with real-time transparency and institutional-grade execution quality.

Advantages Over Pooled Vehicles

Managed accounts offer several structural advantages compared to hedge funds or managed futures funds. Investors maintain direct ownership of assets with individual account statements from their custodian, enabling complete transparency into positions, transactions, and performance. This direct ownership also eliminates counterparty risk associated with fund structures.

Liquidity terms can be more flexible since managers can accommodate redemptions based on individual account circumstances rather than fund-wide policies. Tax reporting is simplified as investors receive standard brokerage statements rather than K-1s or complex partnership allocations. Additionally, accounts can be customized to accommodate client-specific constraints or preferences.

Risk Management Framework

Institutional managed account programs implement multi-layered risk management including position limits, correlation analysis, value-at-risk monitoring, and systematic stop-loss protocols. Real-time risk systems track exposure across accounts to ensure consistency and prevent concentration risks.

Our approach at Avertis emphasizes capital preservation alongside return generation. We employ maximum drawdown controls, daily risk assessment, and position sizing algorithms that adjust exposure based on market volatility. This disciplined risk management targets consistent performance across varying market conditions rather than maximizing returns in favorable environments alone.

Performance Measurement and Reporting

Professional managed account programs provide comprehensive performance reporting including time-weighted returns, money-weighted returns, Sharpe ratios, maximum drawdown statistics, and attribution analysis. Monthly or quarterly reporting supplements real-time account access through custodian portals.

Transparent reporting enables investors to evaluate manager performance rigorously and compare results against relevant benchmarks. Swiss managers typically provide both gross and net-of-fee returns, clearly disclosing management fees, performance fees if applicable, and transaction costs.

Regulatory Oversight and Investor Protection

Swiss-regulated asset managers operating managed account programs must maintain minimum capital requirements, demonstrate professional qualifications, implement robust operational procedures, and undergo regular FINMA audits. These requirements ensure that managers meet institutional standards for governance, risk management, and client protection.

Investor protection mechanisms include segregated custody of assets at regulated brokers, daily mark-to-market valuation, and mandatory reporting of conflicts of interest. The Swiss framework balances regulatory oversight with operational flexibility, enabling professional managers to implement sophisticated strategies while maintaining investor safeguards.

Selecting a Managed Account Provider

Due diligence when selecting a managed account provider should evaluate strategy consistency and rationale, historical performance across full market cycles, risk management processes and infrastructure, regulatory status and compliance track record, fee structure and alignment of interests, and operational capabilities including technology and execution quality.

At Avertis Private Capital Management, we provide qualified investors with access to institutional-grade managed trading within transparent, regulated account structures. Our Swiss-based team combines quantitative expertise, risk management discipline, and a commitment to client transparency that defines modern asset management excellence.