Chicago Firm Offers Hedge-Like Mutual Fund

Jul 23 2009 | 2:25am ET

Chicago-based Driehaus Capital Management has launched an absolute return mutual fund designed to take advantage of a broad range of opportunities in the credit markets.

Driehaus said the Driehaus Active Income Fund is unlike recent spate of “hedge-like” mutual funds in that it already boasts a three-year track record and has received a 5-star Morningstar rating.  Assets in the fund currently exceed $800 million. The fund invests primarily in U.S. fixed income and floating rate securities, of both investment and non-investment-grade credit quality, by employing in a variety of short-term trading strategies.

According to K.C. Nelson, portfolio manager of the new fund, the fund pursues relative value and outright long and short investment opportunities across a variety of credit instruments and is looking to trump returns of long only core bond allocations, with equal or less volatility.

“The credit markets currently offer some extraordinary investment options,” he said.  “However, this ‘cheapness’ exists in only certain segments of the market, and these segments are constantly changing. A static, long-only core approach with no hedging mechanism can fail to take advantage of these changes. This fund gives investors exposure to the credit markets in a relative value format, while hedging away virtually all of their interest rate risk.”


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