Funds and Strategies


 Convertibles crash to earth

Just how did this stable-but-dull strategy hit a period of such turbulence?

You know it's a bad time to be running a convertible arbitrage hedge fund when a loss of 2% is considered a good return. Indeed, words like "bloodbath" routinely pop up in conversations about the performance of these funds in 2005, particularly in March and April. According to the Absolute Return convertible arbitrage index, these funds were down a collective 1.57% in March and 2.75% in April. But those numbers don't tell the whole story.

Some of the heretofore best