After a miserable 2008, most hedge funds have rebounded, none more so than those practicing convertible arbitrage. The strategy tries to profit from price discrepancies between convertible bonds-bonds that can be converted into equities at certain times-and equities of the same company. The funds were up 21.6% through May, making them the top-performing hedge fund category, reports EDH EC-Risk, an asset-management research center.
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