Some hedge fund strategies are still working

``The bifurcated character of the market over the past year has compromised the profitability of many hedge fund strategies, especially those focused on stocks. While equity long, equity long/short, emerging markets, and various sector funds registered strong double-digit gains during the second half of 2009, nearly all lost money during the first half of 2010, according to hedge fund data tracker BarclayHedge... However, several hedge fund strategies thrived during both environments, including convertible and fixed income arbitrage, distressed securities, and event driven. And what these strategies have in common, says Mr Waksman, is that they do particularly well when interest rates are falling.''