Fixed income arbitrage top performing strategy in January

Fixed income arbitrage top performing strategy in January

The Credit Suisse/Tremont Hedge Fund Index gained 0.17 per cent in January as hedge funds posted positive performance despite market reversals.

The best performing strategy in January was fixed income arbitrage (2.02 per cent) with managers finding a number of opportunities in the credit markets, which as a rule became uncorrelated to equity markets with several sectors showing positive performance.

Event driven managers produced generally positive returns (1.42 per cent), largely driven by gains from credit positions and hedging strategies that mitigated equity losses.

Event driven managers were also supported by ongoing technical conditions as credit markets held steady in January despite weakness in equities and both the CS Leveraged Loan and High Yield Index sustained gains of 1.81 per cent and 1.27 per cent, respectively.

Despite slightly negative performance for the overall emerging markets sector, emerging Europe-focused managers experienced gains with the MSCI EM Eastern Europe Index finishing the month up 1.8 per cent.

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