Hedge funds that follow the managed futures or global macro strategy are more than twice as likely to fail as those following a convertible arbitrage or event-driven strategy, according to a recent paper.

"Hedge funds and their implications for financial stability", published last month by the European Central Bank and quoting the work of academics, said 14% of managed-futures hedge funds were wound down over the 10 years between 1994 and 2003 (the most recent year for which the databases are complete).