The strategy of Crocodile Fund is designed to grow with the market, but not to move with every wave
Crocodile Fund was established to protect and grow your wealth against inflation and loss of purchasing power by investing in scarce, productive assets.
Historically, equities have delivered by far the highest returns among all traditional asset classes.
If you had invested $100 in 1927 in a broad portfolio of U.S. equities, that investment would have grown to $982,817 by 2025.
The chart below shows data from 1927 through 2024, with the blue line representing a broad portfolio of U.S. equities.
The S&P 500 Index — the broad U.S. stock market index that includes leading (international) companies such as Microsoft, Apple, Nike, Boeing, McDonald’s, Visa, and ExxonMobil — has achieved an average annual return of +12.6% since 1960. This serves as the foundation of our strategy (represented by the blue line in the chart above).
The objective of Crocodile Fund is to significantly outperform this historical average, targeting an annual return of over +20% after fees.
This objective has also been achieved by the fund manager since July 2023, when this strategy began live trading. See the Results page for details.
How does Crocodile Fund achieve this?
Crocodile Fund primarily invests in broad equity indices such as the S&P 500 Index, or in specific sectors showing strong upward momentum.
By investing in entire indices rather than individual companies, idiosyncratic (company-specific) risk is minimized.
To enhance returns, the fund uses leverage, which is applied only under favorable market conditions, based on proprietary indicators that provide early warnings of potential market reversals.
The idea is to capture the full upside during strong market phases and reduce leverage when indicators signal increased risk or potential market downturns.
The chart above clearly shows the effect of 3x leverage. The orange line represents the average performance of the S&P 500 since 1960 (+12.6% per year), while the blue line shows the same strategy with 3x leverage.
When risk levels rise — for example, during signs of economic slowdown or increasing stress indicators — the position is reduced or temporarily hedged.
This way, we aim for maximum growth in strong markets and capital preservation in weak markets.
The core of our strategy is simple:
Move fully with the market during upward phases.
Protect and preserve during downward phases.
By combining long-term growth, smart use of leverage in rising markets, early-warning indicators for elevated risk, and disciplined risk management, Crocodile Fund seeks to achieve consistently high returns with smaller drawdowns than the broad equity market, such as the S&P 500 Index.