MORE HEADLINES
Economic Update
Gross domestic product increased at an annual rate of 3.0% in the first quarter of 2010.
Domestic Equity
U.S. equities reversed trend and posted significant declines in May.
International Equity
International equity markets fell precipitously in May amid the European sovereign debt crisis.
Fixed Income
The Barclays Capital Aggregate Bond Index (BCAG) gained 0.8% in May.
Real Estate Securities
Real estate investment trusts (REITs) outperformed the broad equity markets in May.
Hedge Funds
Risk appetite quickly shifted course and abated during May.
THE MERITS OF CREDIT HEDGE FUNDS
The broad rally in credit markets following the credit crisis of 2008 narrowed yield spreads for risk assets back toward historical averages almost as quickly as they had widened. We believe today’s credit markets, specifically high yield bonds and bank loans, offer a more limited “margin of safety” for accepting long-only credit risk amid a backdrop of a slow economic recovery.
