Early estimates indicate that the Credit Suisse/Tremont Hedge Fund Index will finish up approximately 0.80 per cent in January.

Early estimates indicate that the Credit Suisse/Tremont Hedge Fund Index will finish up approximately 0.80 per cent in January.

Relative value managers were generally up for the month, buoyed by improving credit markets and central bank interventions.

After facing very significant technical and fundamental difficulties in 2008, convertible arbitrage managers overall had a strong month as appetite for corporate bonds improved and crossover buyers emerged. Convertible arbitrage was up 7.43 per cent, fixed income arbitrage up 0.38 per cent and equity market neutral up 1.91 per cent.

Event-driven managers saw the first signs of a rebound in six months, up 0.65 per cent. On the credit side, the liquid portion of high yield bonds moved because of a demand for yield, and some buyers emerged for illiquid parts of the market.
 
Many global macro managers started the year on a strong note, up 2.54 per cent, profiting from the steepening yield curves and strengthening of the US dollar. Yield curves steepened in the US, Europe and Japan, while bond markets sold off during the month.

The 10-year US Treasury bond moved from 2.20 per cent at the end of December to 2.82 per cent, while the yield on the two-year Treasury note surged to 0.95 per cent.

The estimate is based on 58 per cent of assets reporting; final January performance will be published on 17 February.