Reported 4 months ago
Hedge funds are returning to a bond trade strategy known as convertible arbitrage, where investors capitalize on price discrepancies between convertible bonds and underlying stocks, which was previously crushed during the financial crisis. This strategy has seen a resurgence in the first quarter of 2024, outperforming other relative value strategies, with favorable conditions such as low-interest rates and high stock prices driving increased hedge fund performance. The issuance of convertible bonds is on the rise, providing new opportunities for hedge funds, with firms like Linden Advisors and Context Partners already reaping gains from this strategy.
Source: YAHOO