Volatility revives appeal of relative-value funds

Relative-value arbitrage funds are one of the main hedge fund strategies to benefit from mis-priced assets, says Lyxor Asset Management, as they will likely have less correlation to volatile markets than other categories. Hedge funds became highly correlated to their benchmarks from mid-2011, as European debt problems started to dominate market movements, Lyxor research indicates. It was cited as the main reason for disappointing performance in the sector last year. Asian hedge …