The bucket of Relative Value strategies tracked by Hedge Fund Research notched a 0.22 percent gain in February, marking the 14th straight month of positive returns for the investment style, according to Ken Heinz, HFR’s president.

The last time the RV category registered a decline was in December 2008.

Relative value, as many readers probably know, is hedge fund industry catch-all jargon for strategies seeking to exploit pricing dislocation between two related or similiar securities, usually bonds. If Long-Term Capital Management still existed, most likely it would be considered a relative value fund.

Fixed-income arbitrage and convertible arbitrage are among the most common sub-styles of RV.

When the financial meltdown/credit crisis hit in late 2008, liquidity on Wall Street dried up like Scottsdale in summer. RV, which inherently requires leverage to make the discrepancy exploitation game worth playing, got slammed, Heinz explained.

“But as liquidity has come back in to the market, relative value has benefitted and has proven the most consistent performer of any category we track,” Heinz explained.

Among the best performing sub-style within Relative Value is “multi-strategy relative value,” he added.

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