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Hedge funds post solid gains for May

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The Credit Suisse/Tremont Broad Hedge Fund Index returned a solid 4.06 per cent for May 2009, the third consecutive month of positive returns and the largest monthly performance since F

The Credit Suisse/Tremont Broad Hedge Fund Index returned a solid 4.06 per cent for May 2009, the third consecutive month of positive returns and the largest monthly performance since February 2000, according to Lipper.
 
Over May all hedge fund strategies except dedicated short-bias posted positive performance. Confirming the trend of the previous two months, the best performing hedge fund strategy was emerging markets, returning a solid 6.96 per cent, while the worst performing strategy was dedicated short bias at -0.55 per cent.
 
Monthly performance dispersion among Credit Suisse/Tremont hedge fund strategy indices tightened in May to 751 basis points after peaking in April at 1,474 bps. May’s reading compared to a monthly average since 1994 of 889 bps.
 
Over May the average performance for the 7,000 hedge funds tracked by Lipper was a positive 5.77 per cent-171 bps above the Credit Suisse/Tremont Broad Hedge Fund Index.
 
A record 143.81 percentage point monthly performance difference in May divided the top and bottom performers of the 7,000 actively reporting hedge funds tracked by Lipper.

Stock markets globally moved along an upward trend. Developed markets rose 8.81 per cent month on month, according to the S&P Global BMI Index, with all of the 25 markets ending the month in the black.

Similarly, although of a larger magnitude, emerging markets gained 19.54 per cent in May, with all of the 21 markets closing in positive territory. The US (+5.22 per cent) ranked above Korea at the bottom of the monthly performance league table of developed countries as profit-taking drivers and concerns about financing requirements of the stimulus programs weighed.

Along with Hungary (+26.89 per cent) the top emerging market performers in May were three countries of the BRIC aggregate, with India climbing 37.70 per cent (Indian shares climbed in the second half of the month after the ruling coalition’s overwhelming election victory on 17 May), Russia posting a 28.46 per cent gain, and Brazil rising 21.96 per cent.

All sectors of the S&P 500 Index except consumer discretionary (-1.06 per cent) and telecommunication services (-1.32 per cent) posted positive returns for May.

Financials (+13.10 per cent) confirmed the trend to recovery, topping the performance league table and outperforming the energy sector (+10.16 per cent). Financial stocks rose on expectations that the recession in key global economies was easing, while energy stocks tracked the price of crude oil higher.

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