Reuters – At least 20 top hedge funds boosted their positions in financial institutions in the latest quarter in a sign that Wall Street is ready to bet on more risky sectors in the hope of longer-term rewards.

The push into financials indicates that fund managers including Steven Cohen and John Paulson, who are watched closely as barometers of risk, have shifted from routine merger arbitrage plays to directional bets that have more potential.

The aggressive switch was given credence by stress tests conducted by U.S. regulators that underscored the underlying health and viability of banks — if they could raise capital.

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Tags: financial-institutions, fund-managers, merger arbitrage, top hedge funds

West Palm Beach (HedgeCo.net) – Due to poor market conditions in the distressed securities space, Dow Jones’s hedge fund arm has suspended publication of the Dow Jones Hedge Fund Distressed Securities Strategy Benchmark.

The Dow Jones Hedge Fund Convertible Arbitrage Strategy Benchmark was also halted in January, 2009 and remains suspended until further notice. The remaining strategies—Equity Long/Short, Equity Market Neutral, Event Driven and Merger Arbitrage, will continue to be published on an end-of-day basis.

Launched in November 2003, the Dow Jones Hedge Fund Strategy Benchmarks measure individual hedge fund strategies. The six existing strategies are Equity Market Neutral, Convertible Arbitrage (suspended), Distressed Securities (suspended), Merger Arbitrage, Event Driven and Equity Long/Short . DJHFI provides style-pure, hedge fund strategy indexes that exhibit highly correlated component returns.

Tags: accredited-investors, alex, benchmark, benchmarks, convertible arbitrage, distressed-securities, dow-jones, further notice, hedge fund strategies, hedge fund strategy, hedgeco, indexes, individual-hedge-fund, long short equity, merger arbitrage, palm-beach, west palm beach