WEST PALM BEACH, FL (www.hedgeco.net) – New Edhec study shows that Hedge funds that trade convertible bonds returned to positive territory in June as a result of the narrowing spreads. The activitiesin the convertible arbitrage arena also helped the overall hedge fund market to rise into the positive territory for the first time in 2005 according to the findings of the study. While theconvertible arbitrage strategy is still down 6.2 percent year-to-date, June returns for the asset class rose 1.14 percent according to Edhec.
Edhec report also showed that the top performing strategy for June was the Managed Futures strategy which posted a 2.51 percent gain for the month. The year-to-date average for managed futures is still negative, down 3.3 percent. Managed Futures strategies rely on sophisticated computer analytical models in trading.
The Edhec study noted, “Favorable conditions on the bond market as characterized by strong returns and low volatility of the broad bond market explain the good result for this strategy. The study also explained that, “The outperfomance of small cap over large cap stocks and of growth over value stocks observed in June typically helped these managers to achieve positive returns in June.�
According to Edhec, the worst performing category in June was Fixed-Income Arbitrage with a bare 0.06 percent gain for the period. Short sellers were also classified as low performer in June with only 0.27 percent gain for the month. The strategy is however up in its year-to-date average with 6.9 percent gain for the year so far.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: Editor@hedgeco.net
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