Hedge funds are playing a smaller role in fixed-income trading, according to a new survey.

While banks and real-money investors greatly increased their fixed-income trading volume over the past year, hedge fund volume was flat, Greenwich Associates found. As a result, hedge funds’ share of U.S. fixed-income trading volume fell to 20% from 29% in 2006-2007. All told, U.S. fixed-income trading volume rose 12% in the past year.

Hedge funds still play the major role in some segments of fixed-income trading, with absolute trading volumes in high-yield credit products, leveraged loans and structured products increasing as hedge funds delever their portfolios. And hedge funds account for 95% of trading volume in distressed debt, and more than 50% in high-yield credit derivatives, structured credit and leveraged loans.

The Greenwich study also showed the Lehman Brothers remains the preferred fixed-income dealer to hedge funds, followed by JPMorgan Chase, Goldman Sachs, Deutsche Bank and Morgan Stanley.