Performance

Strategy focus: Distressed players: Still on the sidelines

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The credit crisis, and the corporate bankruptcies and restructurings it promises to bring on, should be good news for distressed funds. But until default rates on corporate bonds begin to pick up, distressed managers may remain on the sidelines. One promising development: Since January, the total amount of debt owed by financially distressed U.S. companies has risen by $40 billion to $104.1 billion, according to Standard & Poor's.

In February, distressed funds eked out a tiny gain, but the strategy remains in negative territory for the past 12 months - and for the year to date. According to