Early estimates indicate the Credit Suisse/Tremont Hedge Fund Index will finish up 2.09 per cent in March, the highest return since November 2009.

Managed futures was the best performing sector in the period, returning an estimated 4.84 per cent in March, with trend followers posting the highest returns within the sector.

Gains were largely generated from trades in equities, crops, base metals and particularly from short exposures to the Euro and Sterling.

Emerging markets returned an estimated 3.62 per cent in March, making a comeback from the previously negative returns seen in the first two months of 2010. Returns were largely driven by profitable currency trades and strong equity performance across emerging markets.

Event driven finished up an estimated 3.36 per cent in March. Credit driven situations were the main drivers of returns in the space, as managers benefited from strong credit markets, which, in turn, were bolstered by a record level of junk bond sales.

Long/short equity funds returned an estimated 3.04 per cent last month, as global equity markets rallied following various positive economic indicators.

Conversely, dedicated short bias managers struggled throughout the month, finishing down an estimated 6.21 per cent.

Global macro experienced mixed performance and finished almost flat for the month. Managers with long exposures to sovereign credit finished in negative territory, while those with currency and equity focus typically performed well.