Sygnum Launches ETH Alpha Fund Targeting 8% to 10% Annual Returns Denominated in Ether
Swiss digital asset bank Sygnum has opened its market-neutral ETH Alpha Fund SP to professional investors, targeting 8% to 10% annual returns net of fees. Returns are measured and paid in ether rather than dollars, with the bank estimating conventional ETH staking yields at roughly 2% to 3%.
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What Sygnum Launched
Sygnum launched the ETH Alpha Fund SP, a market-neutral fund for qualified and professional investors, and it opened to subscriptions on November 2, according to the bank's Thursday announcement. The fund targets annual returns of 8% to 10% after fees, with all gains and losses recorded in ether rather than U.S. dollars.
The bank says conventional ETH staking currently yields about 2% to 3% annually. The fund layers trading strategies on top of native staking to push the target higher, and it is positioned for holders who want to grow their ETH balance without selling existing exposure.
How the Return Stack Is Built
The base layer is native Ethereum staking, through which holders help secure the network and collect protocol rewards. On top of that, managers add options premium collection, cross-venue arbitrage, and income from funding rates and other derivatives carry positions. Research materials also reference statistical and volatility arbitrage as systematic, model-driven components.
The bank describes these strategies as market-neutral because their intended returns do not depend primarily on ether rising. Sources differ on how far that label extends. Sygnum's framing treats the trading layers as directionally hedged, but the fund's underlying asset is ether, so investors remain fully exposed to ETH's price in dollar terms. A strong year that adds 10% more coins could still show a loss in dollars if ether falls sharply.
Risk and Structure
Fund materials list risks tied to derivatives, staking, liquidity, counterparties and trading systems. Some strategies use leverage, which the bank acknowledges can increase losses in volatile markets. Options selling can generate steady income for long stretches and then produce a large loss during a sudden price spike, while funding-rate strategies tend to pay most when leverage is elevated and can shrink when trader appetite cools.
The fund is organized as a Cayman Islands segregated portfolio company. Collateral is held through Sygnum Protect, the bank's off-exchange custody service, so client collateral sits with Sygnum while managers execute trades on supported venues. The bank says this reduces collateral held directly on exchanges, though it does not eliminate counterparty or trading risk. The minimum ticket is $100,000 or its ETH equivalent, subscriptions are monthly with two business days' notice, and redemptions require 15 calendar days' notice. Liquidity is also subject to an investor-level gate of up to 10%, which can limit how much any single investor withdraws at once.
Precedent and Context
The launch follows Sygnum's BTC Alpha Fund, which started in October 2025 in partnership with Starboard Digital. That Bitcoin-denominated vehicle raised more than 750 BTC, around $65 million, by late January 2026, and posted an 8.9% annualized return in its first full quarter. Sygnum also cites a performance record for a related strategy since January 2022 showing an 18.34% annualized return, 22.57% cumulative return, 6.4% annualized volatility and a Sharpe ratio of 2.21, though those figures were not independently verified for this report.
Sygnum, founded around 2017 to 2018, operates under a Swiss banking license and holds licenses in Singapore and other jurisdictions. The fund is available to eligible investors in approved markets, including Switzerland.
Why It Matters
For Traders
Monthly subscriptions and 15-day redemption notice with a 10% investor gate mean capital is locked in ETH exposure for weeks, not hours, so timing decisions should account for that.
For Investors
A dedicated institutional vehicle that frames returns in ETH signals growing demand for yield-bearing ether products beyond plain staking and may shape how allocators benchmark ETH holdings.
For Builders
Off-exchange custody models like Sygnum Protect that keep collateral with the custodian while trades execute elsewhere are a design pattern worth tracking for institutional DeFi and CeFi infrastructure.
This article is for information only and is not financial advice. Read the full disclaimer.
