In departure from tradition, merger arb funds now seem to be hitching their wagons to the S&P
Dec 8th, 2009 | Filed under: Hedge Fund Industry Trends, Today's Post
Although many hedge fund strategies have relatively low market correlations, it can be notoriously difficult for them to avoid getting sucked into a market downdraft. Last year’s negative performance across several strategies is proof. One strategy that has traditionally had a low correlation during normal times, but a propensity to sink during market storms is Merger Arbitrage. As we recently discovered, however, this asymmetric quality seems to be waning. More…
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