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Tungsten Capital: AI-powered fund as alternative for fixed-income investors


Though treasury yields have been rising recently, they remain low by historical standards. In Europe, the proportion of government bonds with a yield of less than one percent is 85%. AI-based strategies may qualify as a suitable alternative offering low correlation to equities and positive returns, explains Frankfurt-based fund manager Tungsten Capital.

Frankfurt/Germany, March 30, 2021 – Government bonds remain a great cause of concern in many institutional portfolios: Eight out of ten investors find that there are hardly any returns to be had from them. Every second investor thinks that government bonds have currently lost their function as a counterbalance to stocks and as a safe haven, according to a survey by investment company Tungsten Capital.

What to do? Many investors are assessing real assets such as real estate and precious metals, primarily gold. Others are increasing the proportion of equity in their portfolios. The problem: These asset classes usually have a significantly higher risk profile than classical fixed income investments.

Innovative solution
To close this gap efficiently and as a counterweight to stocks, Tungsten Capital has designed an innovative solution based on artificial intelligence (AI) that can serve as an alternative to bonds. The mutual fund Tungsten TRYCON AI Global Markets (ISIN: LU0451958309) can go both long and short in a multi-asset universe of 60 markets. While correlation of both real estate markets and common liquid alternatives with the European stock market is 0.8 and above, the quantitative fund seeks zero correlation with other asset classes. In contrast to illiquid alternatives, it is tradable on a daily basis. “We are evaluating millions of data points every day. The fund enables investors to benefit both from bullish and bearish market periods”, says Pablo Hess, portfolio manager of the Tungsten TRYCON fund.

Award-winning results
Earlier this March, the TRYCON fund has been honored for its AI strategy with the UCITS Hedge Awards 2021 as the “Best CTA Short Term Trader in 2020 and over a period of 2, 5, 7 and 10 years”. The fund has returned 6.22 per cent in 2020. Even during the difficult period of the global Covid-pandemic outbreak, the fund delivered gains of more than 5 per cent.

A video for a quick introduction to the AI strategy of the TRYCON fund can be found here:

About Tungsten TRYCON
Tungsten Capital Management GmbH, based in Frankfurt am Main, is an independent asset management company regulated by BaFin with assets under management in excess of 500 million euros. With the Tungsten TRYCON AI Global Markets, the company offers a highly diversified absolute return fund that gives investors access to new data analysis technologies and artificial intelligence (AI). The fund has received several international awards. The two portfolio managers Pablo Hess and Michael Günther have been researching the field of artificial intelligence and its application to the financial markets since the year 2000. Both are among the pioneers in the integration of artificial intelligence for investment decisions.

Contact TRYCON Team
Michael Günther
Developer and portfolio manager
T: +49 69 710 426 622