Hedge funds gained on average 2.28 per cent in April, according to the Barclay Hedge Fund Index compiled by Fairfield, Iowa-based BarclayHedge, which reported that 16 of its 18 hedge fund

Hedge funds gained on average 2.28 per cent in April, according to the Barclay Hedge Fund Index compiled by Fairfield, Iowa-based BarclayHedge, which reported that 16 of its 18 hedge fund sub-indices enjoyed positive returns for the month.

'The overall performance of the hedge fund industry has been on-again off-again in 2008, with losses in January and March offsetting February and April gains,' says BarclayHedge founder and president Sol Waksman.

Technology soared 6.41 per cent to erase a first quarter drop of 5.58 per cent, while BarclayHedge's Pacific Rim Equities Index jumped 3.75 per cent after three straight months of losses. Fixed income arbitrage regained 3 per cent after a 5.71 per cent plunge in March.

The Emerging Markets Index rebounded 3.87 per cent in April following a 4.64 per cent loss the month before. 'Global equity markets enjoyed a broad-based rally, raising stock prices in both developed and emerging markets,' says Waksman. 'Stock markets in Brazil, China, and India saw double-digit increases for the month.'

The Distressed Securities Index gained 1.99 per cent in April after five straight months of losses, and Waksman says: 'Market pundits are speculating that the financial sector's worst losses from the sub-prime meltdown may be behind us.

'As evidence, they cite recent price increases in credit default swaps for financial firms, as well as a narrowing of the interest rate spread between investment-grade and high-yield credits.'

The BarclayHedge Fund of Funds Index rose 1.16 per cent in April. The Equity Short Bias Index was down 2.73 per cent for the month, but it lead continues to lead all indices in 2008 with a 10 per cent gain year over the first four months of the year.

BarclayHedge, formerly known as the Barclay Group, was founded in 1985 and tracks more than 6,600 hedge funds, funds of hedge funds, and managed futures programmes for its 18 proprietary hedge fund indices and eight managed futures indices.