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From Kirsten Bischoff, Opalesque New York:
Mortgage arbitrage funds may have had a slow month in December, but with 24% gains for the year they finished out at the top of the performance rankings, according to data compiled by Bloomberg (related).
A New York-based fixed income market-neutral hedge fund called the Midway Market Neutral Fund ended the year one of the top ranked funds in that strategy, returning +53.47% - and +3.25% (est.) in December.
According to communication with investors, John Morris, Managing Director at The Midway Group, attributed part of the fund’s success to a favorable environment and digging “way beyond headline noise in chaotic markets to identify mispriced cash flows”.
“Midway has a ten-year track record of doing this,” he explained in a recent press release. “We seek to find cheap cash flows and to buy them even cheaper while maintaining a disciplined risk management approach to preserve market neutrality. This strategy has produced annualized net returns of 20% over ten years with a Sharpe Ratio in excess of 1.7 and with little correlation to broader markets, and or, to other asset classes.”
Many hedge fund strategies broadly outperformed equity markets in 2010, ...................... To view our full article Click here
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