Hedge funds post their best monthly returns in nine years

Date: Tuesday, June 30, 2009
Author: David Crow, City AM.com

HEDGE funds posted their best monthly returns in over nine years in May as an appetite for risk returned to the industry, according to data released yesterday.

The Credit Suisse/Tremont Hedge Fund Index closed up 4.1 per cent in May, with nine out of ten strategies posting positive returns.

Emerging markets funds had the best month and finished up almost seven per cent, as managers benefited from increased optimism about global growth and rising commodities.

And convertible arbitrage funds continued to make a comeback, finishing up 5.8 per cent in the month. In the US, the near $6bn (£3.6bn) in new convertible bond issuances were met with healthy demand from investors.

In yet another sign of a recovery in markets, many long/short equity managers increased their net long exposures, helping them to return 5.2 per cent – the highest monthly return for the strategy since June 2000.

Meanwhile, the global macro sector generated positive returns for the seventh consecutive month in a row and finished up 1.5 per cent.