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Hedge funds specializing in distressed-
debt investments were among the sector’s best performers last year (see chart). The CSFB/Tremont
distressed-debt hedge fund index posted a 22.99
percent gain in the year to November. With capital flows to distressed debt funds rising and the volume of new high-yield bond issuance—which competes to some extent for investor attention—skyrocketing, is it time to reevaluate my distressed-debt investments?
Nasdaq added seven new technology stocks to the Nasdaq 100 index, with an emphasis on semiconductors, computer components and wireless companies, as the technology sector rebounded. If these high volatility stocks are now in vogue, should I increase my investments in technology?
Once Iraqi oil begins to flow, prices are likely to fall despite OPEC efforts to prop them up. What does this mean for my investments?
The dollar hit all-time lows against the euro in December. Do my investment managers use currency overlay strategies to protect the value of my foreign investments from the dollar’s decline?
Soft-dollar commissions are under fire from the Securities and Exchange Commission and, oddly enough, the asset management industry itself. If these arrangements—in which fund managers direct trades to the brokers who provide them with perks like Bloomberg terminals and free research—are outlawed, what will it mean for the commissions I pay? What will it mean for the performance of my portfolios?
Foreign investment in the United States failed to offset the U.S. current account deficit in September and October, according to figures released late last year. If I believe foreign investors will continue to shun U.S. assets, should I hedge against a drastic decline in the dollar? How can I benefit from a further deterioration of the dollar?
Washington Mutual lowered its earnings expectations due in large part to a fall-off in the rate of mortgage refinancings. At the same time, builders reported that new housing starts remain strong. Should I be shifting my investments out of the mortgage originator and servicer sector and away from mortgage-backed securities, or will new mortgage business take up the slack as refinancings fall off?
The Bush Administration agreed to lift steel tariffs that had brought the United States into conflict with many of its trading partners. Will this have any effect on my investments in industrial companies?
U.S. and European regulators are redoubling their efforts to standardize international corporate accounting standards. Will any of
my investments in companies with global operations be adversely affected? Is there any way to position my investments to take advantage of this convergence of standards?
Eurex, the world’s largest futures exchange, is expected to open for business in the United States this month. The Swiss-German exchange is looking to take significant market share away from the U.S. futures exchanges, especially in core Treasury futures products, by offering low fees and user-friendly electronic trading. How will this affect the futures and fixed income markets? Is there a way for me to position myself to take advantage of the coming battle among the futures exchanges?
Related Chart
CSFB Tremont Hedge Fund Index |