September 25, 2023 05:00 AM
Graphic: Convertible arb funds provide steady returns
Hedge funds employ convertible arbitrage strategies to profit from the mispricing between a convertible bond and the underlying stock. Historically, they have provided steadier returns; for example, in 2022's challenging environment convertible arb funds lost just 1%. In fact, convertible arbitrage funds have provided lower volatility and better risk-adjusted returns than other hedge fund strategies over the past decade.
Monthly index returns since September 2022
Annual index returns since 2013