Tough Road Ahead For Securitized Credit Hedge Funds

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HFA Staff
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Hedge funds

The list of funds who tumbled in May and have continued to under-perform in June is getting longer by the day. Credit focused funds, especially those who trade mortgage backed securities, experienced a time of high performance as the Federal Reserve took up a $85 billion/month bond purchase program out of  which $40 billion was dedicated to MBS purchases only. As the Fed continues to drop heavy hints that it will wind down the easing program as soon as the labor market improves, funds focused on such securities are in for a tough ride. The billions injected into the market with…

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The post above is drafted by the collaboration of the Hedge Fund Alpha Team.