Chasing credit



The liquidity squeeze in global markets has made trading strategies linked with greater China an attractive target for some hedge funds, especially those employing credit strategies. Credit-focused funds have a particular penchant for the liquid Hong Kong, Taiwan and mainland China credit markets - and they are likely to outperform funds with more general exposure, when default rates and counterparty risk are rising, as is evident from widening credit spreads in June.

Most activity in credit deri