Deleveraging boosts bond fund managers
Source: MarketWatch - July 29, 2009
July 2009

Portfolio Manager Bradley Kane was quoted in an article by Sam Mamudi on how bond managers are back in the trading action due to the credit freeze.

Quoted from MarketWatch:

...But as hedge funds stopped buying -- and were even selling -- debt securities, prices fell, raising yields and widening spreads. Late last year, spreads spiked to more than 6%.

"[The absence of levered hedge funds has] been a positive for mutual funds because they were better able to get allocations at higher yields," said Bradley Kane, a portfolio manager at SCM Advisors, which oversees about $3 billion in assets.

Kane said that the situation has settled somewhat recently, and that hedge funds are once again finding opportunities.

"The majority of hedge funds that were leaving the high-yield and leveraged loan markets have left," said Kane. "Currently, there's a little bit more access to leverage and there are still attractive yields depending on the credit risk that you're willing to take."

www.marketwatch.com