Hedge funds post their best monthly returns in nine years

E fu

E 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.<br /><br />The Credit Suisse/Tremont Hedge Fund Index closed up 4.1 per cent in May, with nine out of ten strategies posting positive returns.<br /><br />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.<br /><br />And convertible arbitrage funds continued to make a comeback, finishing up 5.8 per cent in the month. In the US, the near $6bn (&pound;3.6bn) in new convertible bond issuances were met with healthy demand from investors.<br /><br />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 &ndash; the highest monthly return for the strategy since June 2000.<br /><br />Meanwhile, the global macro sector generated positive returns for the seventh consecutive month in a row and finished up 1.5 per cent.