Ellington leads the fightback


Reeling from massive sell-offs in July, fixed-income markets stabilized in August. That trend, combined with renewed liquidity in fixed-income markets, provided fertile ground for hedge fund managers to retrench and even post some sizable gains.

Added liquidity and tightening spreads helped across the board for fixed-income strategies, including the mortgage-backed arena. This enabled funds like Ellington Mortgage Partners gain a hearty 4.8% in August, more than offsetting a July loss of 2.8%. At the end of the month, the Ellington fund was up roughly 7.2% for the year.

Meanwhile, another Michael Vranos fund, New Ellington Partners, gained about 3.5%, leaving