PAMM portfolio
A PAMM portfolio is a collection of PAMM accounts combined into a single entity. This type of investment allows the investor to diversify their risk as they can select PAMM accounts with the optimal balance of potential risk and reward, as well as the amount to invest.
The basic idea of PAMM portfolios
- The manager creates a portfolio, which includes of a number of PAMM accounts, and invests their own money, serving as a guarantee that they will oversee the portfolio prudently. The manager can change the constituent PAMM accounts that make up the portfolio as well as the share of these accounts in the portfolio by using their own capital and funds provided by investors.
- The investor monitors the effectiveness of the manager's portfolio from the site, and then invests in the PAMM portfolio they most like the look of.
- Trading is carried out on the constituent PAMM accounts of the PAMM portfolio.
- Profits and losses divided proportionally among all participants in the PAMM portfolio. The manager receives remuneration as a share of the profit from investors.
How PAMM portfolios operate
- The manager creates a PAMM portfolio, investing their own fixed capital, and sets the terms and conditions for investors.
- The investors decide where to place their funds based on how long the PAMM portfolio has been running, the level of return, degree of risk, and the terms offered by the manager.
- All funds invested in the PAMM portfolio are distributed across the PAMM accounts that make it up.
- Investors can track the level of return and the structure of the portfolio and make a request to increase or decrease their funds in the account.
- PAMM accounts are made up of the portfolio; with either positive or negative results.
- The profits, after the manager has received their remuneration, are distributed amongst the investors in the portfolio, which includes the manager, in direct proportion to the amount they have invested.
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