Our Strategy
The Science of Alpha.
A systematic, machine learning-driven approach to U.S. equities, designed for superior risk-adjusted returns across any market regime.
$250,000 → $7,522,000 (Jan 2016 – May 2026)
*Based on rigorous out-of-sample backtesting and live execution methodology.
Systematic Entry:
The Machine Learning Edge.
Our entry signals are driven by proprietary, high-performance machine learning. Unlike human traders, our model processes thousands of historical features simultaneously to rank every stock in the U.S. universe by "Conviction Score."
Multi-Factor Input: The engine integrates fundamental health, technical momentum, and volatility regimes.
Conviction Ranking: The model utilizes a rigorous high-conviction threshold based on proprietary weighted indicators. This ensures only the highest-probability setups are advanced to the execution phase, maintaining consistency regardless of market shifts.
Concentration: We focus on the Top 5–25 highest-ranked names. When the machine finds a better opportunity, it rotates capital instantly.
The Exit Model:
Dynamic Risk Mitigation.
Getting in is easy; getting out is where alpha is won or lost. Our strategy uses s a proprietary exit architecture combined with advanced ensemble machine learning.
Momentum Benchmarking: The model utilizes 52-week high breakout data to identify and track strong trending stocks. By benchmarking performance against these peak momentum windows, the system identifies the optimal environment for capturing gains.
Multi-Feature Analysis: The system continuously monitors price-volume deviation, volume exhaustion, and candle structure across a robust feature set to validate structural market shifts.
Intelligence-Driven Exits: Our high-performance ML model fires a "Sell" signal the moment the exit probability crosses a predictive threshold, aiming to protect gains before the broader market reacts.
Performance Integrity Across Every Regime.
Our proprietary selection engine utilizes advanced algorithmic scanning to filter and rank opportunities in real-time. This ensures only the most robust, high-alpha assets make it into the final strategy.
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Evaluates broad market conditions. Determines the overall portfolio posture—Risk-On, Neutral, or Defensive.
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Scores 15 distinct sectors. Favors names in leading sectors while avoiding hard exclusions of lagging ones.
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The core AI engine. Scores the universe based on proprietary momentum and fundamental quality to select a concentrated 15-name portfolio.
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After the initial stock selection, the model applies Advanced Technical Analysis to further refine setups. This multi-layered filter identifies the optimal price action and structural support needed for a high-integrity entry and exit.
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To ensure disciplined risk management, the system strictly enforces a 2.5% entry cap per position. This prevents over-exposure and protects the broader portfolio from individual asset volatility.
Built for Scale.
Disclaimer: Image for illustrative purposes only. Visual representations of data, interfaces, and infrastructure are conceptual and do not reflect actual software performance, real-time trading data, or guaranteed execution outcomes. UpDown Investments Fund I, LP, UpDown Management, and ET Capital Partners are not registered investment advisors or broker-dealers. All investments involve a high degree of risk, including the possible loss of principal. Past performance of automated systems or algorithmic models is not indicative of future results.
Execution: Fully automated institutional-grade execution designed for high-liquidity and minimal slippage.
Universe: Liquid U.S. Equities. Our filters specifically exclude low-volume "penny" stocks to ensure capital efficiency.
Audit Trail: Every trade signal, reason for entry, and exit probability is logged, creating a transparent audit trail of the machine's decision-making process.
Overview of Fund Structure
LP Investors
Target: $50,000,000
Minimum Investment: $125,000
Management Fee: 2% per annum
Performance Allocation: 20% Carry
Liquidity: Quarterly redemptions after a 24-month lock-up; 60-day notice.
Disclaimer: This summary is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Any such offer will be made only by means of the Confidential Private Placement Memorandum (PPM). In the event of any conflict between this summary and the PPM or Limited Partnership Agreement (LPA), the terms of the PPM and LPA shall govern. ET Capital Partners acts solely as an administrative facilitator and does not provide investment, legal, or tax advice.
FAQs
Confidential – For Accredited Investors Only
What is the fee structure for UpDown Capital?
1
We operate on an institutional-grade “2 and 20” structure:
Management Fee: 2% per annum, billed quarterly.
Performance Fee: 20% of net profits, assessed annually above a “High Water Mark” (meaning we don’t get paid until we’ve recovered any prior losses).
What is the minimum investment requirement?
2
The minimum initial investment is $125,000. This threshold ensures we maintain a concentrated base of sophisticated, long-term partners.
HOW IS THE FUND STRUCTURED FOR LP INVESTORS?
Our partnership is built on a performance-first model to ensure absolute alignment between the Manager and our Limited Partners.
The Terms: $125,000 minimum investment with a 2% annual management fee and a 20% performance allocation (Carry).
The High Water Mark: We only participate in performance once all prior losses are fully recovered. If the fund isn't up, we don't take a carry.
The Liquidity: To protect the integrity of the algorithm’s trading cycle, there is an initial 24-month lock-up, followed by quarterly redemption options with 60 days' notice.
3
Yes. To allow the algorithm to execute through various market cycles, there is a 2-year initial lock-up period. Following that, redemptions are available quarterly with a 60-day written notice.
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Is there a lock-up period?
How does the machine learning strategy actually work?
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Our lead strategy utilizes advanced machine learning to analyze the U.S. equity universe on a weekly basis. This process identifies and ranks 'high-conviction' opportunities positioned for momentum moves. We focus on active capital rotation into top-tier rankings, ensuring that data-driven intelligence—not emotion—dictates our exits.
How do I track my investment performance?
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Through our partnership with ET Capital Partners, every investor receives access to a secure, private investor portal. This portal provides 24/7 access to performance metrics, quarterly updates, and all necessary tax documentation (K-1s).
Can I invest using a retirement account?
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Absolutely. ET Capital Partners specializes in Self-Directed IRA facilitation. They can assist with the setup, entity formation, and coordination with your custodian to ensure the investment is compliant and may allow you to defer or eliminate taxes on these gains.
What has the historical performance been?
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Our strategy has been validated across an 11-year backtest (2016–2026). While past performance is not a guarantee of future results, the strategy demonstrated a 35.2% annualized return and a 2.35 Sharpe Ratio during that period.
How is my investment in UpDown Capital taxed?
9
UpDown Investments, LLC is a pass-through entity. The entity itself doesn't pay corporate income tax; profits and losses are "passed through" to participants.
What tax documents will I receive?
Every participant will receive a Schedule K-1 annually, outlining their share of the partnership’s income and gains.
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What is the expected tax rate?
Because of the systematic weekly rebalancing (with average holding periods typically under 30 days), most gains are classified as Short-Term Capital Gains. These are typically taxed at your Ordinary Income tax rate.
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Will I be taxed on gains even if I don't withdraw cash?
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Yes. As a partnership, you are taxed on your allocated share of the fund's net profits for the year, whether they were distributed or reinvested.
Disclaimer: ET Capital Partners and UpDown Capital do not provide tax or legal advice. Please consult with a professional.