The Credit Suisse/Tremont Hedge Fund Index finished up 4.1 per cent in May, with nine out of ten sub-strategies posting positive returns, with some sectors showing the best performance in almost a decade.

Emerging Markets managers, up almost 7 per cent in May, benefited from optimism on global growth and rising commodity prices, with Eastern European-focused managers outperforming other regions for the third month in a row.

Convertible Arbitrage funds continued to make a comeback, finishing up 5.8 per cent for the month. In the US, the nearly $6 billion in new convertible bond issuances were met with healthy demand from a spectrum of investors.

Many Long/Short Equity managers increased their net long exposures resulting in a 5.2 per cent return for the month, the highest monthly return for the strategy since June 2000. Some remain cautious that a switch from a government-led recovery to a consumer-led recovery may face hurdles.

The Global Macro sector generated positive returns for a seventh consecutive positive month, finishing up 1.5 per cent. The strategy's flexibility and tactical trading ability may have helped managers to post positive returns during both up and down equity market environments in 2009.