Tradex Global Advisory Services, LLC
investorrelations@thetradexgroup.com
203-863-1500
@Tradex_Global
The Tradex Group is a minority-owned alternative asset manager located in Greenwich, CT. In addition to managing single strategy hedge funds, Tradex also manages niche fund of funds. This blog is intended for informational purposes only and nothing contained in it constitutes investment advice or solicitation. The views expressed are strictly those of the author. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Follow us on LinkedIn: http://linkd.in/LqokEf and Twitter: @Tradex_Global.
Tuesday, July 16, 2013
Flash Update - Short-Biased High Yield Portfolio
June was an exciting month in the high yield
market as the 10Y Note rose another 50 bps in yield, while hitting a peak of
2.74%. This set off alarm bells for HY investors who are long
credit and short convexity. This was merely a warning sign, and in
many cases prices have already recovered close to the recent highs.
It can easily be seen in the table below how swiftly losses will come,
especially when there are significant negative credit events in the
pipeline. Our Short-Biased High Yield Portfolio focuses on
event-driven, vulnerable high yield credits that will likely lose a tremendous
amount of value when a negative catalyst becomes apparent. This
fall in bond price will likely be accelerated by any rise in interest rates,
which we believe will continue. Next time, the recovery in price
may not be so kind...
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