Sygnum Launches ETH Alpha Fund Targeting 8% to 10% in ETH
Swiss bank Sygnum opened its ETH Alpha Fund SP on Nov. 2, targeting 8% to 10% annual returns in ETH by layering options, arbitrage and funding strategies on top of staking yields of about 2% to 3%.
Swiss digital asset bank Sygnum has launched the ETH Alpha Fund SP, a market-neutral fund for professional investors that targets annual returns of 8% to 10%, net of fees, counted in ETH rather than dollars. The fund opened to investors on Nov. 2, 2026, and is available to qualified and professional investors in approved markets, including Switzerland.
The pitch rests on a simple gap. Sygnum estimates that conventional ETH staking yields about 2% to 3% a year, and average annualized staking yields stood at 2.63% at the end of September, with 43.8 million ETH staked, nearly 36% of supply. The fund tries to lift that base rate by layering other income sources on top of native staking.
How the fund generates yield
Those layers are options premiums, cross-venue arbitrage, and derivatives carry and funding strategies, with research materials on the fund also describing statistical arbitrage and volatility arbitrage in the mix. Think of staking as the rent a landlord collects, with the derivatives sleeves acting as additional tenants paying for different kinds of space.
Gains and losses are measured in ETH. That is the core design choice, and Markus Hammerli of Sygnum explained the reasoning:
"Institutions that hold ETH for the long term increasingly think in ETH, not dollars, and judge their year by whether they end it holding more,"
Markus Hammerli, Sygnum
He added that the firm "built the fund around that measure, adding in-kind income strategies to staking within the safeguards of a regulated structure."
Terms and structure
The minimum investment is $100,000 or the ETH equivalent. Subscriptions are monthly with two business days' notice, while redemptions require 15 calendar days' notice, and an investor-level gate of up to 10% applies.
Custody runs through Sygnum Protect, the bank's off-exchange setup, so collateral stays at the bank while managers trade on supported venues. The vehicle itself is a Cayman Islands segregated portfolio company, with Sygnum Bank as custodian.
The 8% to 10% figure is an investment objective, not a guaranteed payout. Investors also keep full exposure to ETH's dollar price, so a decline in ETH could shrink dollar-denominated holdings even if the fund earns more ETH.
Risks the label does not remove
"Market-neutral" describes a hedging intent, not safety. Options selling can earn steady income and then lose heavily in a sudden price spike, and funding-rate strategies pay best when leverage is hot and can shrink when trader appetite cools. Listed risks include derivatives, staking, liquidity, counterparty and trading systems, plus leverage in some strategies. Keeping collateral off exchanges does not eliminate trading or counterparty risks either.
Following the BTC template
The product mirrors Sygnum's BTC Alpha Fund, launched in October 2025 with Starboard Digital and also targeting 8% to 10%, in BTC. That fund raised over 750 BTC, about $65 million, by late January 2026 and posted an 8.9% annualized return in its first full quarter.
For institutions, the ETH version extends a template that has already drawn assets. Whether the extra yield over plain staking, roughly 5 to 8 percentage points at the target, survives real market stress is the question the fund's first full quarters will begin to answer.
