Concept of fhe Fund*

* The investment fund is in the development and testing stage - the fund is not officially established and does not distribute investment units.

Artificial Intelligence Currency Hedge Fund (hereinafter "the Fund") is an investment fund managed by artificial intelligence which assets are invested in national currencies through a hedging strategy.

The objective of the fund is to earn positive returns in the long run, regardless of the general direction of the markets or the phase of the economic cycle. The benchmark is not applied.

Investment strategy guidelines:

  • Autonomous investment decision making and risk management - investment decisions are based on forecasts of financial markets made by artificial intelligence, risk management is controlled by computer algorithms;

  • Application of hedging - active, artificial intelligence-controlled, coordination of opposite moving investment positions in one portfolio;

  • Active investment (5-30 investment transactions per day).

Investment objects


The Fund's assets are invested in the Foreign Exchange Market in spot transactions (derivative financial instruments). The Fund's investment process involves 8 freely traded major world currencies:

  • USD - United States dollar;

  • EUR - European single currency euro;

  • JPY - Japanese Yen;

  • GBP - British pound sterling;

  • CAD - Canadian dollar;

  • AUD - Australian dollar;

  • CHF - Swiss franc;

  • NZD - New Zealand dollar

Currency spot tansactions are executed through 28 currency pairs:


Fund management


The Fund's investment process is fully automated and run without manual transactions made by the Fund manager. The investment process is carried out using the Investment decision-making and risk management software (hereinafter the "System") that is developed by the Fund management team. The System consists of the following two parts:

  • the artificial intelligence system used to monitor markets, make market forecasts and justify investment decisions;

  • computer algorithms used for automated execution of investment transactions and risk management.

Artificial intelligence system:

  • is developed based on Artificial Neural Networks architecture and trained with processed historical market data. The system is periodically trained with the latest market-related information.

  • continuously is analyzing current market data and making forecasts of market movements 24 hours a day and 5 days a week, which are used to justify the:

    • opening of new investment transactions;

    • closing open separate investment transactions or closing full positions;

    • calculations of probabilities of market changes;

    • calculation and execution of Take profit and Stop loss levels.

The main tasks of computer algorithms:

  • to check and assess whether each forecast made by the artificial intelligence system corresponds to the usual movement of particular currency pair;

  • to check if there is no anomalies in the markets, which might increase uncertainty or increase transaction costs;

  • to calculate levels of Take-profit and Stop-loss for market orders and adjusting them as the structure of the open position changes;

  • to calculate and monitor sizes of newly opened market trades;

  • to control portfolio diversification, position size and entry levels of new trades;

  • consistent reduction of loss making positions;

  • to execute and control the hedging of open positions.

Powers of the Fund Manager

  • The Fund Manager shall not open new trades manually, except in specific cases where this is necessary for hedging purposes;

  • The Fund Manager may manually close open trades if:

    • it is observed that the System has made an error or is not functioning as intended;

    • the System fails due to internal or external reasons (eg. computer failures, internet connection failures, server or investment service intermediaries / brokers failures and etc.);

    • markets are highly uncertain and the risk of loss increases significantly.

  • The Fund Manager may influence the investment process only in the following ways by:

    • changing the programming code of the System;

    • training artificial intelligence system with new information;

    • temporarily suspending the operation of the System;

    • opening new transactions for hedging purposes;

    • manually closing open trades when there is a need to reduce a risk.

Investment portfolio diversification and risk management rules


The Fund's investments are made on a closed system basis - investments are made in two directions and in all possible combinations of currency pairs from a fixed list of currencies.

Guidelines for portfolio diversification:

  • investments are made in 8 currencies: EUR, USD, JPY, GBP, CAD, AUD, CHF, NZD;

  • investment transactions are executed in 28 currency pairs;

  • both short and long currency transactions are executed.

Leverage risk management

Currency spot transactions are derivatives that are traded with leverage included. The use of leverage can lead to large fluctuations of the net assets value (NAV), therefore in assessment of leverage risk the main focus to the real leverage** takes into account, which is measured at three levels:

  1. the level of the entire investment portfolio;

  2. the level of individual currencies;

  3. the level of currency pairs.


All levels of real leverage that are mentioned above are monitored by a computer algorithm by setting maximum amounts in descending order of priority. Lower-priority leverage limits apply only as long as the higher-priority limit is not exceeded.


The following real leverage limits apply to the Fund's investment activities:

  • for the whole portfolio of financial instruments: 5:1;

  • net position of one currency: 3:1;

  • position value of one currency pair: 3:1;

  • the size of absolute leverage *** is not limited.


** Real leverage is the value of the net investment position (Exposure) divided by the Fund's NAV. The real leverage shows the real impact of the acquired investment instruments on the portfolio results.

*** Absolute leverage is the value of open investment position divided by the Fund's NAV. Absolute leverage reflects only the value of purchased investment instruments, but does not reflect their impact on portfolio performance.


The above limits of real leverage do not apply:

  • for individual profitable trades or groups of trades which have set the Stop-loss level with a better than execution price, i.e. when in any case profit will be gained from separate trade or a group of trades;

  • when a new trade is open for hedging purposes, i.e. in cases when by increasing the particular loss-making position reduces the real leverage's size of the whole portfolio.

Hedging executed through:

  • coordination of short and long trades;

  • currency arbitration method; ****

  • exposure control. *****


**** As an example of currency arbitrage we can take 3 positions of equal value: long EUR/USD, short EUR/JPY and long USD/JPY, which neutralize each other and allow to guard against any unwanted movement in the market.

***** When choosing between two equivalent transactions the weights of the individual currency pairs in the overall portfolio and the actual Exposure of specific currencies are estimated, with preference given to those transactions that increase net exposure the least.


Exit from loss-making positions is performed by:

  • dedicating a part of profit which was made by closing profitable trade to partly cover a loss of the same position by closing the respective value of the same loss-making position using the FIFO method.

  • dedicating a part of profit which was made by closing entire profitable position to partly cover a loss of the most loss-making position by closing the respective value of the most loss-making position in portfolio using the FIFO method.

System testing


The investment decision-making and management system's software is constantly tested and improved. Testing looks for systemic errors and vulnerabilities in the system, tests new risk management algorithms and performs stress tests in order to check how the system is performing under conditions of increased leverage and increased market volatility.

During system testing, it is allowed:

  • temporarily exceed the limits of leverage;

  • temporarily suspend the operation of the system;

  • manually close open trades;

  • test the new market entry strategies;

  • test the new exit strategies;

  • improve solutions of risk management;

  • train the artificial intelligence system with new data.

During system testing, the following is prohibited:

  • open investment transactions manually;

  • to hold open disproportionately high value investment positions that have been opened due to systemic errors;

  • use other investment instruments than specified in these Rules;

  • increase investment positions in narrow exchange rate ranges;

  • to open new trades in periods of high market volatility when transaction execution cost is increased.

The investment decision-making and management system's software is constantly improved by applying the most proven solutions found during the tests, therefore the Fund's performance results published on this website will not necessarily reflect the results in the future.

More information:

The investment Fund is on the phase of development and testing. The Fund is not officially established and does not distribute investment units. The team of the Fund does not accept investments from third parties - at this stage only the personal resources of the Fund's creators are involved. The material on the website is for informational purposes only. Nothing in this page shall be construed as a direct offer or recommendation to buy or sell units or any other securities of the Fund. Do not rely on the information you find here for personal investment decisions.