Fixed Income Asset-Backed Strategies

Fixed Income Asset-Backed Strategies

Fixed Income Hedge Funds Thrive So Far in 2010

Hedge funds focused on fixed income asset-backed strategies performed well in the first six months of 2010. Hedge funds investing in stocks typically took heavy losses due to the market volatility in the last few months, while fixedincome asset- backed strategies were up 6.36% so far this year.
First-half performance figures are showing the same pattern for hedge funds as for more mainstream investors -- the most successful were in fixed income, the least successful in stocks.

The HFRI Fund Weighted Composite Index, a broad measure of hedge fund performance, shows a six-month loss of 0.18 percent at the end of June, following a 0.81 percent fall in June itself.

Within various strategies, however, there was a wide range of performances. Hedge funds focused on corporate debt, for example, gained 4.76 percent for the half year, while the biggest loser was in energy and basic materials, down 4.81 percent.

Fixed-income asset-backed strategies were the best performers, up 6.36 percent.

"Volatility increased significantly in 2Q with concerns about sovereign credit risk, currency policy adjustment, economic and energy market impact of the (BP) environmental disaster and concerns about slowing growth in both developed and emerging economies," HFR, a research firm, said.  Source

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