Performance profile - CDS plays boost FrontPoint Financial Services


In a month when many hedge funds struggled to do more than preserve capital, FrontPoint Partners' Financial Services Fund posted double-digit returns.

The fund gained 12.07% in July, taking it to 33.11% for the year ended July 31. By comparison, the Absolute Return U.S. Equity Index was down 0.6% for the month to total 6.42% year to date.

FrontPoint's CDS portfolio contributed the most to the fund's July returns as markets experienced a repricing of credit risk, which hit the financial sector particularly hard. Short positions in equities were also profitable, with bets against homebuilders, rating agencies, mortgage companies and