Hedge Funds Jump Into T-Bonds With Both Feet

Aug 12 2010 | 12:59pm ET

Hedge funds have increased their U.S. Treasury bonds trading by a factor of almost seven this year, aiming to profit from the usually sedate market.

Hedge funds account for 20% of T-bond trading this year, up from 3% last year, according to Greenwich Associates. The Financial Times reports the spike in T-bond trading stems from both their growing volatility and pricing inefficiencies stemming from the Federal Reserve’s current monetary policy.

Those pricing inefficiencies—caused by the combination of larger issuance and quantitative easing—have created a slew of opportunities for relative value hedge funds, according to the FT.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...