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Convertible securities hedge funds

• Generally look to purchase the bonds or preferred securities and sell common shares against these long positions. The intent is to hedge interest or dividend paying securities with low or no dividend common shares. In the event of a default the bonds and other securities have priority to the common shares. Also, the bonds or preferred stocks usually generate positive cash flows whereas the short positions are generally not responsible for dividend payments. Therefore the fund should have a positive cash flow and protected by relative seniority position in corporate securities. These funds also use warrants and options as portfolio instruments.

 
 

Follow this link for all the terms related to fundfundssecurities.

 
 Embedded terms in definition
 Cash flow
Cash
Common shares
Default
Dividend
Event
Hedge
Instruments
Interest
Long position
Long
Options
Portfolio
Position
Preferred stock
Purchase
Securities
Sell
Seniority
Shares
Short position
Short
 
 Related Terms
 
12b 1 funds
Additional hedge
Asset backed securities
Beta equation mutual funds
Beta mutual funds
Bond arbitrage hedge funds
Book entry securities
Busted convertible
Commodity funds
Contingent securities
Convertible
Convertible bond
Convertible eurobond
Convertible exchangeable preferred stock
Convertible preferred
Convertible preferred shares
Convertible preferred stock
Convertible price
Convertible security
Cost of funds
Cost of funds index
Covered or hedge option strategies
Cross hedge
Currencies and major foreign market hedge funds
Debt securities
Delta hedge
Delta hedge of an option
Discount securities
Distressed securities
Dividend yield funds
Emerging markets funds
Emerging markets hedge funds
Endowment funds
Equity hedge funds
Exempt securities
External funds required plug figure
Fed funds
Federal agency securities
Federal funds
Federal funds market
Federal funds purchased funds
Federal funds rate
Forward fed funds
Funds from operations
General securities registered representative license
Good funds
Government securities
Hedge
Hedge fund
Hedge fund types
Hedge properties
Hedge ratio delta
Long hedge
Macro hedge
Macro hedge funds
Manufactured housing securities
Market premium convertible securities
Marketable securities
Micro hedge
Money market hedge
Money market mutual funds
Mortgage backed securities
Mortgage backed securities clearing corporation
Mortgage backed securities hedge funds
Mortgage pass through securities
Mutual funds
National association of securities dealers automated quotation system
National association of securities dealers, inc.
Natural hedge
Objective mutual funds
Organized securities exchanges
Partial hedge
Pass through securities
Pension funds
Perfect hedge
Project loan securities
Public securities administration
Registered general securities person
Registered securities principal
Securities
Securities act of 1933
Securities analysts
Securities and exchange commission
Securities and exchange commission sec
Securities exchange act of 1934
Securities exchanges
Securities investor protection corporation
Securities registration
Sell hedge
Short hedge
Stocks and bonds hedge funds
Stripped mortgage backed securities
Stripped mortgage backed securities smbss
Surplus funds
Target funds
Term fed funds
Treasury securities
Unlimited funds
Value funds
Vulture funds

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