Reversing losses


On the back of a strong July, when equity prices marched higher and convertibles snapped back, convertible arbitrage funds reported their second month of gains, providing reprieve from widespread losses earlier this year and kindling hopes that the strategy may be turning the corner. The Absolute Return Convertible & Equity Arbitrage Index was up 1.29% in July, on top of a 1.3% gain in June. Still, the strategy is in negative territory for the year, down 3.28%. Some of the most impressive gains in July came from Lydian Overseas Partners, up 2.8%, and Waterstone Market Neutral OS Fund,