YOUTH does not normally go hand in hand with financial wisdom but Jean-Yves Sireau has offset his lack of years with technology. At 24, he runs a derivative fund with US$5.8 million under management and has recently won the support and financial backing of the Regent Fund Management group. He established the Fortitude Group in 1993 with $6,000 of his own money and contributions from friends. Now the fund trades daily on the high-risk derivative markets, speculating on the rise and fall of stock indexes around the world. It was the young Frenchman's interest in computers, and how they could be used to calculate share price movements and, to a lesser extent, those of the markets themselves, that lured him into the business. 'Most people see market fluctuations as a mathematical problem but I looked at it according to the laws of physics to determine which factors force stock markets to move up and down,' he said. With this starting point, he wrote a computer program that drew on historical share price performance to help predict future movements. Similar programs have found their way into other fund-management offices as a back-up, but the computer determines all the trades made by the Fortitude Group. The program forecasts the movement of the markets in Hong Kong, Tokyo, Sydney, Paris, London, Germany and Switzerland and dictates when the fund buys and sells. 'The computer programmes give me a very slight advantage,' said Mr Sireau. 'Of every 100 trades, 55 will be profitable and over hundreds of trades, the extra five profitable trades accumulate to generate profits.' In February last year, the two-year-old fund reduced its leverage and diversified into new markets and now trades with a volatility rating of 11 per cent. Regent first invested in the fund last year then earlier this year it bought a 30 per cent stake in the fund's management company, Fortitude Services. Geneva-based fund-management firm Aurelia Research owns 19.9 per cent of Fortitude, leaving Mr Sireau with 52.1 per cent. The collapse of Barings left derivative funds - and perhaps, to be more precise, derivative traders - with an unfortunate legacy. Even with all the checks and balances, derivative funds are a high-risk investment. This was particularly true when the fund began. 'From an investor viewpoint, there was very little security and almost no guarantees,' said Mr Sireau. 'Derivative funds do not have a bad reputation for nothing.' Regent's cash has given Fortitude Group the security it badly needed and a base in Regent's Central office. 'Regent has brought money, research, and all the infrastructure that we did not have before,' he added. The fund is not authorised by the Securities and Futures Commission and is not available to the general public.