Credit Hedge Funds
Credit Hedge Funds Having a Good Year
Over the first five months of the year, credit-focused hedge fund portfolios were up 4.11 percent compared with a 2.4 percent gain for stock-focused ones, according to hedge fund tracking service eVestment|HFN.
Well-known managers such as David Tepper and Daniel Loeb have seen hefty returns in their credit-focused portfolios on bets they made in the second half of 2011.
Some managers are profiting from those shrewd trades, which they made on mortgage-related securities, U.S. corporate debt and beaten-down European sovereign and corporate bonds. Others, meanwhile, benefited from an early move into junk bonds, which have been one of the credit market's better-performing sectors this year.
It is another indication that, in a year of great turbulence in the stock market, bonds have been the place to be despite the yield on the 10-year U.S. Treasury hovering around 1.61 percent.
"At the end of last year, European financials were massively battered down so we went long those corporate credits - they were great investments," said Peter Faulkner, a credit portfolio manager at $2 billion (1.3 billion pounds) P. Schoenfeld Asset Management. Source
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Link to This Resource: Credit Hedge Fundshttp://richard-wilson.blogspot.com/2012/06/credit-hedge-funds.html