A cute and prickly investment
The Hedgehog model is trend following to its nature and hence trying to take advantage of the fact that the financial markets, such as commodities, currencies and stocks, move in trends, both up and down. The program trades long term trends up and down in a limited number of markets chosen with low mutual correlation.
The model has no correlation to any index; the performance depends entirely on the manager’s ability to follow a trend, regardless of market conditions. The Hedgehog strategy is prickly and uncomfortable as a hedgehog’s skin; with an equity curve that can show long periods of drawdowns. But when you least expect it, there might be a strong jump, which within short takes the capital back to the sunny side again.
Hedgehog is suited for experienced investors who are prepared to withstand drawdown periods that could last for one year or more, with peak-to-valley declines of at least 20% every year, in order to get the chance of a return that matches such a risk.