Is credit poised to topple?

Thu Jul 1, 2004

After a good run many investors worry that the boom may be over

Credit strategies may be growing increasingly popular as a distinct investment genre, but a tough time for many credit funds in May's markets has some wondering whether their promise may have been a bit exaggerated. This was especially true among convertible bond strategies that use credit. So much so that in June, Goldman Sachs published a second installment of a research series entitled "What is Ailing the U.S. Convertible Market."

The Goldman Sach's Convertible Arbitrage Index lost 1.3% in May, its worst monthly showing in five years. The dip left the benchmark up by an equal 1.3% for the year, showing why convertible funds, which are often long-only, haven't been doing as well in 2004. It's worth noting that Goldman Sachs analysts attributed the weaker showing to a summer sell-off of converts, due to an array...

ISSN: 2151-1845 / CDC10004H

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