Taiwan fund looks to China CB

Taipei-based Prodigy expects volatility to pick up next quarter.

Prodigy Asset Management, a Taipei-based hedge fund set up by a group of ex-Yuanta Securities traders to trade convertible bond strategies, has launched a new fund. The Phoenix Fund was launched in March with $10 million under management, raised mainly from Prodigy's existing Taiwanese investor base.

The CBs we're investing in are bank guaranteed, with very limited downside risk, but high potential upside, says Prodigy's executive director, Samuel Wang. We think the CB market is the best way to gain equity and forex exposure to China.

Wang backs up his argument by citing that the Shanghai equity index has fallen by 15% from 2002-2004, whereas China's convertible...

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