The Tungsten TRYCON AI Global Markets Find, which was one of the first AI-based UCITS strategies when it launched back in 2013 is up 4.1 per cent YTD in 2020. In the drawdown period up to March, when many portfolios suffered considerable losses, it was able to generate a gain of over 5 per cent.
The TRYCON fund, managed by Frankfurt-based asset management company Tungsten Capital Management, is designed to deliver uncorrelated returns.
“Government bonds hardly generate adequate returns against the background of the low interest rate environment. In investor portfolios today, much of the pressure to succeed is on equities. Investors are therefore looking for alternatives,” explains Michael Günther, who develops and manages the fund together with his colleague Pablo Hess.
The TRYCON fund positions itself as a supplement to government bonds, insofar as these no longer fulfil their function as a positive yielding hedge. “Moreover, the strategy is designed to react dynamically – long or short – even to scenarios with sharply falling markets,” adds Pablo Hess.
The QuantMatrix portfolio software developed by the team evaluates a seven-digit number of input variables every day. The computing power can therefore exceed that of conventional, quantitative signals by a factor of 100,000. The goal is to identify different trading opportunities and sources of return.
In a portfolio context, during the past seven years the Tungsten Capital Management says the TRYCON fund has delivered effective diversification for equity portfolios of European and global stocks as well as for active and passive multi-asset portfolios. While most Liquid Alternative funds exhibit a high correlation of more than 0.8 to the stock market, that number is almost zero for the Tungsten TRYCON AI Global Markets (calculated from September 2013 to August 2020).