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Merger Arbitrage Demonstrates its Ability to Deliver Positive Returns in Adverse Conditions

(Opalesque) Merger Arbitrage again demonstrated its ability to deliver positive returns in adverse conditions, Lyxor said in its weekly brief. “This is a strategy on which we have maintained an Overweight stance over the recent quarters despite the recent underperformance,” it said in a report. M&A volumes remained strong in the U.S. in April and rebounded in Europe. Deal spreads are tight, and this is a headwind. However, the strategy is so defensive and uncorrelated with broader market movements that we strongly reaffirm the Overweight stance.

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