Hedge funds pile back into credit default swaps as sales double

According to the Financial Times, there has been an issuance of $20bn to $30bn worth of credit default swaps so far this year, compared to $15bn for the whole of 2016 and $10bn in 2015. Hedge fund managers such as Apollo, Brigade Capital and Blue Mountain are among the high profile investors who have moved back into these products. The riskiest swaps, which are most often bought by hedge funds, have the potential to produce returns of up to the high teens which, in an environment of historically low volatility in credit markets, has been viewed as attractive. The current yield for hig...