The drive for convertibles
Hedge funds are exploring opportunities in convertible arbitrage, a trade that appeared to have gone out of fashion permanently back in 2005. With the promise of lucrative returns having put this strategy firmly back on the map, investors now need to be savvy about which trades they explore. Sarfraz Thind reports
The convertible arbitrage business, which was dismissed as a dead duck a few years ago, has made a roaring comeback. In 2006 convertible arbitrage funds returned an average 12.17% making the strategy the top fixed-income hedge fund performer for the year, according to statistics by hedge fund database Hedge Fund Research Inc (HFRI).
This year the strategy had returned around 5% to the end of
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